The amount of money leveraged in relation to the total amount of money used for investment purposes.
For hedge funds, we survey managers for the amount of leverage they use. We ask on the survey to report this as a ratio, with a ratio of 1:1 meaning no leverage. A ratio 2:1 means that there is an additional $1 borrowed for every dollar of capital. We currently display the ratio as a percent. So, a ratio of 1:1 is displayed as 100%. A ratio of 2:1 is displayed as 200%.