for questions related to understanding basic concepts in finance or certain terms in a particular context

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5
votes
3answers
466 views

What is the “rule of 70” or “rule of 72” with regards to investment, and how do I apply it?

What is the "rule of 72" (sometimes called the "rule of 70") with regards to investment, and how do I apply it?
2
votes
2answers
58 views

What amount will I get back if I hold a bond to maturity?

If I hold a bond to maturity, then on day of maturity, will I get back: The price of the bond at maturity? or, The price I paid when I bought the bond? or, The par value of the bond? My guess is ...
-4
votes
1answer
65 views

Do I need to repay back my line of credit in the form of monthly payments?

When I take a line of credit, do I start making monthly payments, like with a mortgage? Or do I make a lump sum (principal + interest) payment at the end of the term of the line of credit? Or is there ...
2
votes
2answers
46 views

financial statement

i'm a student and in my academic financial statement there is the money which i am supposed to pay for the registration and modules fees on the debit side, which is less than the one on the credit ...
6
votes
4answers
587 views

Buying life insurance at the age of 25

Given that, the person is unmarried and without any dependent, is it advisable to buy life insurance (which is not a term insurance) at the age of 25? Considering it as an investment tool plus a ...
6
votes
1answer
261 views

Is having a Critical Illness Insurance worth it?

I am aware that the typical argument for having a CI insurance is because we just really don't know what will happen in the future and it's better to be protected. But is it really worth it paying for ...
10
votes
2answers
801 views

Is there a term that better describes a compound annual growth rate (CAGR) when it is negative?

When calculating rates of return for an investment or portfolio over time, whether to report or compare performance, one frequently calculates the Compound Annual Growth Rate (CAGR). I've got a ...
13
votes
2answers
478 views

Can someone explain the different kinds of annuities?

So in my retirement and personal investing I have some stocks (very little), a Roth IRA, a Roth 401K and a Traditional 401K (later two are from work and I split things right now). At my age and ...
3
votes
3answers
139 views

What sort of investment accounts are generally used for short term (not retirement) investing?

If accounts such as Roth IRA and 401(k) are designed for investing towards retirement, what sort of accounts do people generally use for short term investing, say 5-10 years? Ideally there would be ...
7
votes
3answers
435 views

What is the point of the stock market? What is it for, and why might someone want to trade or invest?

Sometimes you have to explain this to young people or people unfamiliar with the stock market. Why would a company want to be a stock company? Why would a person want to trade stocks? How does a ...
0
votes
1answer
88 views

How to find if a public company has taken out a loan?

From a company's Income Statement, Balance Sheet, and Cash Flow data, is it possible to figure out if the company has taken out a loan and how much it has taken out?
3
votes
1answer
307 views

How do interest rates work?

My question is very simple. I am considering a CD for my money, but I don't know a whole lot of the financial math that goes into that kind of stuff. My question is about interests rates. Do CD's ...
5
votes
6answers
258 views

Why do investors buy stock that had appreciated?

I understand you make money by buying low and selling high. But even if the stock price goes up, why are we guaranteed that there is some demand for it? After all, it's more expensive now. It would ...
2
votes
3answers
264 views

If prices are falling, who will lend shares to short sellers?

Short selling is a process that involves borrowing shares from a person, selling them and then buying them back at a lower price, thus realizing a profit. In this situation, knowing that prices are ...
7
votes
2answers
221 views

what are the pros and cons of structured deposits?

This morning, I came across the term, structured deposits. As I am still learning about finance, I am quite curious on different types of deposits. In layman's terms, What is a Structured Deposit? ...
2
votes
2answers
17k views

What are “headwinds” and “tailwinds” in financial investments?

I've seen/heard these terms in various writings & broadcasts lately. What do they mean?
1
vote
1answer
3k views

What does “LLP” stand for in the name of an organization?

What does LLP stand for? As in the example name "Flood Law Group, LLP".
1
vote
1answer
573 views

Is a budget comprised of expenses, and/or revenue?

From the book website for Economics Principles in Action by O'sullivan:: States have two budgets: an operating budget and a capital budget. But from Wikipedia: A budget is generally a list ...
1
vote
2answers
260 views

What does “running a very large fiscal deficit” mean?

Recently I was reading an article on ft.com, and I came across this quote: They [yield on gilts and bonds] are particularly striking in the cases of the US and UK,which unlike Germany, run very ...
1
vote
1answer
65 views

Physical Delivery vs Assignment?

In options: What is the difference between the two? Assignment: http://www.investopedia.com/terms/a/assignment.asp#axzz1tG3VpKt8 Physical Delivery: ...
1
vote
1answer
83 views

Why do they call them “financial products”?

As far as I know there are no products involved. All they sell are services. Why then this name "products"?
2
votes
3answers
2k views

How can the ROE on a stock be more than 100%?

I looked at a stock's ROE for Q3 2011 and it was more than 100%, but the operating margin wasn't very high, around 5%. How is this possible?
10
votes
2answers
228 views

Has anyone created a documentary about folks who fail to save enough for retirement?

In this question, the OP suspects that she simply needs to select the right annuity to solve her money problems. And in her defense, many financial institution commercials try to convince soon-to-be ...
2
votes
4answers
1k views

“Derivative” and “asset-backed security”: Same concept, or related?

Derivative and asset-backed security seem to be similar, as both are based on some other assets. So I wonder if they are the same concept?
0
votes
2answers
195 views

What is meant by “proof of funds” and what would such proof be used for?

What does it mean when some funding firm or commercial bank asks for "proof of funds"?
1
vote
1answer
675 views

What's the difference between “marketable” vs. “tradable” (tradeable)?

In Bodie's textbook "Investments": Money market instruments include short-term, marketable, liquid, low-risk debt securities. I was wondering about the differences and relations between ...
8
votes
3answers
231 views

Solid reading/literature for investment/retirement/income taxes?

I'm striving for financial literacy and education. I've been really frustrated with most of the literature that's out there surrounding retirement, income taxes, and investment. Most of it seems ...
11
votes
3answers
840 views

What is the difference between a stock and a bond?

I am just learning about finances (only 14 years old) and have heard about Stocks and Bonds and I would like to know the difference between these two things and wonder why would I invest in one or the ...
6
votes
2answers
1k views

Italy BTP vs. German Bund spread. Care to explain?

I hear a lot of chatting about BTP/Bund spread recently. I am not familiar with this concept. Could you explain what it is and what it means, in layman's terms?
7
votes
6answers
669 views

Ongoing things to do and read to improve knowledge of finance?

In this forum, there are a lot of people whose primary job is programming. And yet they are very knowledgeable on a lot of financial topics. Can you please share what you do/read on a regular basis ...
16
votes
7answers
1k views

Where to start with personal finance?

I am married with kids and starting to look hard at savings for retirement, buying a house and sending my kid to college (still a LONG way away). However, I am completely new to the world of finance ...
6
votes
3answers
623 views

What is the true value, i.e. advantages or benefits, of building up equity in your home?

I am a relatively new home owner, having purchased my first home in October 2009. It was a $315,000 home, purchased with a 5% no-cost loan with I believe 12% down payment. I think the total financed ...
10
votes
4answers
479 views

How to learn about doing technical analysis? Any suggested programs or tools that teach it?

I've been going through the OIC Education Courses recommended by @jaydles in another question about learning options. I'm about halfway through, I've learned a lot about how the stock market works ...
4
votes
2answers
155 views

How can I determine if leaving a lower paying, tax advantaged, job for a higher paying one makes sense financially?

I'm not exactly sure how to go about calculating this problem. I'm a Canadian (Alberta) working in a ministry position at a church. My credentials qualify me for clergy housing, and I make just shy ...
6
votes
3answers
2k views

When inflation is mentioned over a period of more than one year, is it typically reported as a compound annual growth rate?

When we say "inflation has remained steady at 2% for the past 5 years", is that typically taken to mean 2% compounded annually for each of those years, or something else?
3
votes
2answers
4k views

What is the difference between a bond and a debenture?

What's the difference between a bond and a debenture? Are they simply different words used to mean the same thing? (e.g. debenture sounds more business-like than bond).
6
votes
5answers
495 views

Does reading financial statements (quarterly or annual reports) really help investing?

Will learning how to read financial statements really give investors a significant edge? From your experience, is it worth the time to pick up this tool? Edit: Thanks for all the feed back guys. I ...
23
votes
9answers
1k views

Which practice to keep finances after getting married: joint, or separate?

My wife and I have been keeping our finances separate for a long time. Some of my friends just put everything in a big pot. We each have our own pot, but then we have a common pot where we put all ...
5
votes
5answers
1k views

Which secured credit cards start building your credit history right away?

I spoke with 3 banks this morning and they all said that for the time I was on the secured card, they would not report me to the credit unions and companies. They would just keep the score internal to ...
4
votes
3answers
407 views

Recommended finance & economy book/blog for a Software Engineer?

I'm fresh graduate from CS field, and having little bit knowledge of finance and economy. Could anyone suggest this which you think more suits me. Thanks!
0
votes
3answers
432 views

How do I determine future balance owed on a mortgage based on amortization?

A family buys a house worth 326000.They pay 110 000 down and then take out a 5-year mortgage for the balance at j2 = 6.5% to be amortized over 20 years. Payments will be paid monthly. Determine the ...
9
votes
6answers
323 views

Is it a good idea to teach children that work is linearly related to income?

It seems to me that, if you want to teach children at an early age about the benefits of careful personal finance, and other fun concepts (like an intuitive understanding of compound interest), paying ...
3
votes
1answer
51 views

what is the likely reason that the bank have a different year end than the other companies

what is the likely reason that the bank have a different year end than the other companies
97
votes
16answers
6k views

How smart is it to really be 100% debt free?

For the last 2 years, I have been trying hard to be debt free without affecting my personal cash flow. I am by no means a rich person, but I have a decent salary. I still have debt, specifically ...
4
votes
16answers
492 views

What one bit of financial advice do you wish you could've given yourself five years ago?

Suppose you could travel back five years and give yourself one bit of financial advice, anything except stock tips. What would it be?
63
votes
10answers
6k views

Why does gold have value?

I'm curious about why is there so much financial interest and news coverage about gold. It's hard to do things like buy food or pay the rent with gold, but I can do this with cash. Gold doesn't yield ...
3
votes
2answers
92 views

Stocks and bonds have yields, but what is a yield?

I often read about yield such as in this article from Kiplinger, but I have not been able to find a good description of what a yield is. What is it, and why would I care as a novice investor?
2
votes
4answers
232 views

What is a Master Limited Partnership (MLP) & how is it different from plain stock?

I came across a reference to a "Master Limited Partnership" in a news article recently. I understand they are exchange-listed investments like individual stocks. But, what exactly are Master Limited ...
15
votes
3answers
2k views

What is a trust? What are the different types of trusts?

What is a trust? What are the different types of trusts? Are some better than others? What are the different roles involved in a trust?
15
votes
6answers
2k views

Can you explain “time value of money” and “compound interest” and provide examples of each?

Can you explain the time value of money concept, including present value and future value? How does compound interest work? Why is compound interest a powerful concept when it comes to borrowing, ...