currently a stock index stands at 100 and the leveraged ETF is selling for $100. The ETF should generate a return that is twice the daily return on the index .
over the next 21 days the value of the index and its daily percentage change are as folllows.
day XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX
value of the index XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX100
daily percentage change - ,10.0%, -9.1, -10, -11.1, -12.5, 28.6, 22.2, 18.2, -23.1, 5, -3.8, -2, 6.1, -6.7,7.1,-6.7, 8.2, 2.8, 15.6, -20.6
What is the value of the ETF at the end of each day? Notice that at the end of the 21 days, the index is back to its starting value of 100. what is the value
of ETF at the 21 days? sippose that on day 22, the index rises 50 percent from 100 to 150; what is the percentage change in the ETF from day 1 through day 22?
if you bought the ETF on day 1 and held it through day 22, did you earn the leverage return that you expected?