Q2D. Suppose that margin requirements remain at 20% over the next year (same as Q2A.). Further, the return on the stock market is +15 %. The market value of the hedge fund's long positions increases by 15 % and the market value of short positions increases by 10%. The risk-free return is 4% for all cash assets and liabilities (i.e., there is no financing spread). r r Q2D-I. What is the gross return of the hedge fund (ignoring transaction costs and fees)? | Assets MV Equity and Liabilities MV t Long security positions 160 Total Equity (NAV) 100 t+1 t Initial margin for shorts Cash proceeds from short sale Margin loan on long positions Cash in money market account Short security positions 200 Total Cash Total Liabilities Total Total (You do not have to use the balance sheet to solve this problem, but it may help). Q2D. Suppose that margin requirements remain at 20% over the next year (same as Q2A.). Further, the return on the stock market is +15 %. The market value of the hedge fund's long positions increases by 15 % and the market value of short positions increases by 10%. The risk-free return is 4% for all cash assets and liabilities (i.e., there is no financing spread). r r Q2D-I. What is the gross return of the hedge fund (ignoring transaction costs and fees)? | Assets MV Equity and Liabilities MV t Long security positions 160 Total Equity (NAV) 100 t+1 t Initial margin for shorts Cash proceeds from short sale Margin loan on long positions Cash in money market account Short security positions 200 Total Cash Total Liabilities Total Total (You do not have to use the balance sheet to solve this problem, but it may help)