FIN2308 - Mutual Funds or ETFs - Finance Assignment Help

Assignment Task

Background:

1. Mary is 32 and wants to buy her first home
2. A graduate of the Algonquin school of business - she loved the Investment Planning course
3. Has $80,000 in RRSPs (RBC Bond Fund), $70,000 in her TFSA (all in Royal Bank common shares), and $10,000 of cash in bank
4. Earns $100,000 of salary per year
5. Only debt is a $300/month car loan
6. Looking at a $350,000 condo and she is thinking of a 20% down payment of $70,000 (at a minimum)
7. Pre-approved by broker Tom for a mortgage with a 5-year term, a 2.25% rate, and a 25 - year amortization

A) Mary needs to decide how much of a down payment to make and how much to borrow. Should she keep some of her investments and just do the minimum of 20% down of
$70,000 for a conventional mortgage? Or, should she have a smaller mortgage with a down-payment greater than 20%?

Please provide the amount she should put down and the amount she should borrow. Explain clearly why you selected these amounts and your rationale. 4 marks

B) How much from each account should Mary use for the down-payment? Provide clear reasoning why you selected these amounts. Hint: HBP?

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