Calculate your rate of return

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You are a hedge fund manager with $100 million in assets. You feel you have better insight into the emerging markets than most. You decide to invest all $100 million into a basket of emerging market stocks. You feel so confident that you borrow another $100 million at a rate of 6% annually from your prime broker and invest in the same stocks. You decided to hedge some of the risk and short sold $50 million of the emerging markets index. After 1 year, your stocks increased by 26% and the index went up by 22%. Calculate your rate of return.

Reference no: EM13937377

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