A margin limit is NOT borrowed money.
For example:
Margin limit: AUD 50,000
Actually borrowed: AUD 10,000
Interest is charged on: AUD 10,000 only
So simply having a large margin limit does not mean you are paying interest.
However, margin trading is risky. If the stock falls sharply, you may lose more money and could face a margin call.
My advice: If you are a beginner and investing for the long term, avoid using margin unless you fully understand the risks.
Quiz answer: C — AUD 10,000.
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