Question: You are planning to use a cash contribution of $30,000 to invest in a NAB margin loan and are examining three securities as potential investments:

You are planning to use a cash contribution of $30,000 to invest in a NAB margin loan and are examining three securities as potential investments:

ASX Code

Company Name

Single stock LVR

ARG

Argo Investments

75%

DCG

Decmil Group Limited

40%

UGL

UGL Limted

55%

 

Calculate:

  1. The permitted borrowing amount;
  2. The maximum value of the portfolio.

 

Question A2

Briefly discuss two under-pricing theories associated with Initial Public Offerings (IPOs).

 

Question A3 

In terms of privatisation, describe a public-private partnership (PPP).

 

Question A4 

In an IPO, does book building contribute to market efficiency? Justify your answer.

 

Question A5 

Briefly discuss the benefits of securitisation to the loan originator.

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