6. Hedge funds and financial leverage Compared to mutual funds, hedge funds usually invest in a types of investments. Suppose that Thompson Hedge Fund obtains and invests $2 more rrowed funds for every $1 of equity invested. In other words, it can invest $3.50 of assets for each $1 of equity. Also suppose that Thompson fewer leve a 10% return on assets (ROA). Given this ROA, the return on Thompson's equity investment is %. Suppose that Thompson Hedge Fund obtains and invests $2.50 of borrowed funds for every $1 of equity invested. In other words, it can invest $3.50 of assets for each $1 of equity. However, suppose that Thompson suffers a 10% loss, or a -10% return on assets (ROA). Given this ROA, the return on Thompson's equity investment is % 6. Hedge funds and financial leverage Compared to mutual funds, hedge funds usually invest in a types of investments. Suppose that Thompson Hedge Fund obtains and invests $2.50 of borrowed funds for every $1 of equity invested. In other words, it can invest $3.50 of assets for each $1 of equity. Also suppose that Thompson can achieve a 10% return on assets (ROA). Given this ROA, the return on Thompson's equity investment is % Suppose that Thompson Hedge Fund obtains and invests $2.50 of borrowed funds for every $1 of equity invested. In other words, it can invest $3.50 of assets for each $1 of equity. However, suppose that Thompson suffers a 10% loss, or a -10% return on assets (ROA). Given this ROA, the return on Thompson's equity investment is %