Bob buys a property with an 80% LTV interest only mortgage at an annual rate of 6%, with annual compounding and annual payments. Bobs annual cap rate for the first year is 8%.

Which of the following is true about Bobs Return on Equity (ROE) for the first year?

	A.	ROE is higher than if he didnt use leverage
	B.	ROE is lower than if he didn't use leverage
	C.	There is not enough information to answer this question
	D.	ROE is the same as it would have been if he didn't use leverage