HomeCFACFA Level 1CFA Level 1 | Equity: Total Return on Leveraged Stock Positions

CFA Level 1 | Equity: Total Return on Leveraged Stock Positions

  • April 28, 2020
  • Posted by: Fabian Moa, CFA, FRM, CTP, AFM, FMVA, FSA Credential
  • Categories: CFA, CFA Level 1
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CFA Level 1

Topic: Equity

Reading: Market Organization and Structure

 

Investors who buy shares on margin are able to leverage their returns if the share price increases.

When calculating the return on investments for a leveraged stock position, there are a few things to watch out for, like calculating the initial investment, the commissions on purchase and sales, the interest on the loan.

Watch this video for a step-by-step example on calculating the return on a leveraged stock position.

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