To setup your share portfolio, you are considering a Margin Lending product with an LVR of...

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To setup your share portfolio, you are considering a Margin Lending product with an LVR of 70%. a) If you contribute $60,000 of your own cash, what is the maximum amount you can borrow? b) Assuming you borrow the full amount and there is a 10% buffer, analyse the financial/ portfolio management effect under the following market conditions: i. A 5% increase in the portfolio value; ii. A 5% decline in the portfolio value; iii. A 15% decline in the portfolio value. c) Discuss the taxation and financial principles which have been utilized by the financial engineers of the Margin Lending product. To setup your share portfolio, you are considering a Margin Lending product with an LVR of 70%. a) If you contribute $60,000 of your own cash, what is the maximum amount you can borrow? b) Assuming you borrow the full amount and there is a 10% buffer, analyse the financial/ portfolio management effect under the following market conditions: i. A 5% increase in the portfolio value; ii. A 5% decline in the portfolio value; iii. A 15% decline in the portfolio value. c) Discuss the taxation and financial principles which have been utilized by the financial engineers of the Margin Lending product.

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Margin Loan Analysis a Maximum Borrowable Amount With a 70 LVR and your 60000 contribution the maxim... View the full answer