leverage

I have heard that repos can be used to gain leverage, particularly within hedge funds. However, if repo sellers (who borrow cash) have to post collateral, and the value of collateral is reduced via a haircut, wouldn't this in effect be the opposite of leverage? i.e. repo sellers would be getting...

I can't seem to reply to the original thread. Don't quite get the solution posted for 303.3 Let A = Assets and E = Equity with D = A - E. ROE = ROA/Equity = [(5%*A) - (A - E)*4%]/E. Since ROE must be at least 15%, the minimum leverage is achieved when ROE = 15% such that: [(5%*A) - (A -...