Debt Management & Leverage
Date Started: 04 Aug, 2008
Date Completed: 04 Aug, 2008
Results: 2/10 questions answered correctly.

QUESTION 1: An item that is not classified as debt is:
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QUESTION 2: A Line of Credit Mortgage is where:
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QUESTION 3: Some of the main components of a residential mortgage are:
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QUESTION 4: If you borrowed $80,000 to invest in a share portfolio and the total valuation of the portfolio is $130,000, what is the Loan to Valuation Ratio of the portfolio?
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QUESTION 5: If you borrow to buy an investment property for $300,000 and it is leased for $200 per week (market rates). Is the interest on the loan deductible for tax purposes?
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QUESTION 6: Gearing magnifies (increases) your return or loss on your investment?
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QUESTION 7: If you had $170,000 of shares and a margin loan balance of $90,000, what is your gearing ratio?
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Your answer was 0.53.. The correct answer was: 1.13.

QUESTION 8: You have a Call option on 1,000 BHP Shares at $46. The price of the BHP shares then rises to $48. If you decide to exercise the option what is the result at that point?
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Your answer was Depends on what the rest of the sharemarket is doing.. The correct answer was: A profit of $2 for each share less the cost of the option.

QUESTION 9: Positive Gearing is:
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QUESTION 10: In general, an example of a futures trader can be described as follows:
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Your answer was A company that is selling sheep and wants to lock in the price for sale for 12 months time.. The correct answer was: Someone who buys and sells futures contracts with the intent of making capital gains.