The presence of rising asset prices and concessional tax rates on capital gains in a stable interest rate environment is more preferable for a negatively geared share investment than which of the following economic conditions?

Question

Quizplus · Accepted Answer

Negatively geared share investments benefit from rising asset prices and concessional tax rates because the investor can gain from the increased value of the asset and lower taxes on any profits. Stable interest rates also help by keeping borrowing costs predictable. All the other conditions listed (A, B, C) are less preferable because they involve either stable or decreasing asset prices, rising interest rates, or higher taxes on capital gains, all of which can reduce the profitability or increase the cost of a negatively geared investment.

The Presence of Rising Asset Prices and Concessional Tax Rates