ayodayo

If you’re assigning numbers to the question that was in the sample exam, equity isn’t 60, it’s 100. The statement says that “leverage is 40%”, that means that ratio of (amount borrowed) / (Equity) = 0.40. It doesn’t mean that 40% of the total funds are borrowed.
For example: if you had $1,000 in assets and borrowed an additional $500 on margin, you would have a portfolio with 50% leverage. If you borrowed $1,000, you’d have 100% leverage.
Plug this into the leverage equation (as rekooh has done above) and you’ll get the correct answer.