Carry Trade Inputs
Size of debt-financed loan
Nominal annual borrowing rate
How often lender accrues interest
Nominal annual asset return
How often yield is reinvested
Length of trade projection
Carry & Equity Results
Net Spread (EAR)
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Effective annual yield edge
Debt Interest Paid
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Total interest cost
Monthly Debt Service
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Required periodic check
Annual Carry
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Net yearly cash flow
Asset Value (Reinvested)
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Grows with monthly reinvestment
Net Equity After Loan Payoff
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Equity after repaying loan principal at exit
Profit (Uncompounded)
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Total carry skimmed
Asset vs. Debt Projection Trajectory
Comparing asset compounding, debt balance, and net carry equity