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

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3
votes
1answer
504 views

What can we conclude/learn from inst. own %?

I just noticed that some stocks are largely held by institutions while some are very less. What can we conclude/learn from this number?
6
votes
1answer
115 views

Is there a financial product that allows speculation on GDP?

is there an financial product linked to the GDP of the US (or other countries)? There are plenty of derivatives and certificates whose underlying equity is the Dow Jones, which makes it possible to ...
1
vote
2answers
84 views

Unable to understand logic behind why there is no exit load on liquid fund

Was reading about the liquid funds and came across this sentence on one of the sites: Considering that liquid funds are ideally suited for investments that may be required to be redeemed at a ...
0
votes
4answers
1k views

What's the difference between Buy and Sell price on the stock exchange [duplicate]

I am new to stock investments. I usually ask for stock broker to write up a quote for me. I can also check the prices on the Malawi Stock Exchange website. However I am not sure which price she ...
1
vote
3answers
470 views

Why don't people generally save more of their income?

Personally, I can save up to 80% of my income. I believe normal person could save about 50% of their income, but none of countries average even 20%. Why? according to : ...
1
vote
4answers
202 views

Is it good idea to sacrifice some capital for higher income?

Let's assume I hold a bond that yields 3% for some time. Based on my calculations $100 are working in the investment. So it makes me $3 each year. Now let's assume the yields have been increased so ...
0
votes
2answers
261 views

Should I only look at P/E ratio when valuing a stock?

A company is earning 40 cents per share and is trading at $6.00. From there I get the P/E ratio to be 15. It does not have much growth potential and it's earnings are relatively stable and has been ...
0
votes
1answer
142 views

Can I buy stock of a company that just IPO

I'm a college student, and I wonder if I can buy stock from a company right after it finishes its IPO? To be more specific, I'm interested in the IPO of Alibaba, which hasn't happen yet. If I am not ...
0
votes
1answer
76 views

are my calculations for PV, NPV, and rate of return right?

Note: This is not a homework. I teach myself some financial principles and I made up this example to find out if I understood these principles. This example is a just a normal example nothing is real. ...
3
votes
1answer
253 views

What is the difference between an Independent Financial Advisor (IFA) and an Accountant?

I'm looking for some advice on various small personal financial matters relating to pension, salary, taxation etc. I've been given a personal recommendation for an accountant, but looking at their ...
1
vote
2answers
190 views

Why would Two ETFs tracking Identical Indexes Produce different Returns?

-- Edit -- It turns out that the RPG fund creates an index of "pure-style growth" from the S&P 500/Citigroup PURE growth index, where the IVW ETF creates an index from the S&P 500/Citigroup ...
3
votes
5answers
183 views

How should I think about stock dividends?

I'm a 19 year old college student looking at some potential long-term investments, but am first reading as many books as I can, since this sector isn't the field I study. I am reading a book and a ...
0
votes
2answers
139 views

Loan math problem

There was a 9gag post some time ago with the following problem: A car dealer offers Lachlan a car that is priced at $21800, but he only has a $600 deposit. Lachlan's trade-in is actually worth $500. ...
4
votes
3answers
1k views

Why and why would/wouldn't a company split their stock?

When Apple was in the high $600 or so range, it split 6 times and made it more affordable to purchase more shares for less, even though the value was technically the same. I see companies like Google ...
4
votes
4answers
688 views

How much of each stock do index funds hold?

An S&P500 index fund will hold each of the 500 stocks that are in the S&P 500. Does it target holding an equal number of shares of each stock? An equal dollar amount? Does this vary based on ...
0
votes
6answers
36k views

How do companies like WhatsApp and Hike earn money?

How do companies like whatsapp and hike earn money? How actually the Internet we use to to operate them will be actually converted into money??
1
vote
1answer
180 views

Why do some companies (like this company) have such a huge per share price?

Questions Why would they do this, I can't imagine what type of liquidty issues they may have, I know stocks like Berkshire (where stocks are kept high to dissuade short selling, excessive voltailty ...
5
votes
1answer
224 views

Will I see a collection on my credit report if I paid the bill in full?

I received a call from a collections agency a couple of days ago about an unsettled bill of $200. Turns out that during my grad school days (over 7 years ago), we used a water delivery service and I ...
5
votes
4answers
6k views

Should I get a bank account since I recently got my first job?

I'll be starting work this Friday (yay!) and haven't got the slightest clue about any of this. It'll be washing dishes at a restaurant, and I really don't know anything. Do I set up a bank account ...
4
votes
1answer
106 views

Money on the table: Lorillard (LO)?

Lorillard (LO) / Reynolds acquisition news was announced today. Reynolds will buy LO for 68.88 per share. However, the stock dropped today to ~ $60.17. The out of the money call options also reflect ...
-1
votes
1answer
86 views

Net money invested in Stock indexes ended up in red

A look at the Indian Stock exchange trade today here shows a net investment of INR 296 crores but all the indices Nifty (-38.2), BSE (-137.30) ended in red. Why so? When money is pumped into the ...
0
votes
2answers
218 views

What are some way to decide if a e-commerce site is reliable?

I am planning to travel to US for holidays, and my friend in US told me that gift card from mygiftcardsite. Here's the website, and here's where you can register/view your transaction details. Truth ...
3
votes
1answer
162 views

What is a good service that will allow me to practice options trading with a pretend-money account?

I want to get a little more practice before I put my money on the line. I was using Paper Money from thinkorswim through school, but my account is bugged where the buying power will not update. The ...
2
votes
1answer
360 views

What standards should I expect of my CPA when an error was made?

I was storing some product at a fulfillment company in California in 2011 & 2012. I live in Florida where I do business from my home. I have been doing my taxes with a CPA so it would get done ...
1
vote
2answers
1k views

What is the difference between direct plans and Institutional Plan?

When I look at ultra short term funds, I generally see at least these two options for a given fund house. If the fund house name is "ABC", then I generally see these 2 options: ABC Ultra Short Term ...
14
votes
6answers
2k views

What do I need to know before getting a loan?

Recently, due to a series of events, I've been finding myself... uncomfortable with my financial situation. I'm not in debt, but my account balance did drop into the low three-digit figures a couple ...
3
votes
1answer
273 views

What's the difference between 365D, 52W, 12M, 1Y in stock market?

I would like to calc calculate SMA (Simple Moving Average) these kind of data myself and found the following question: What's the difference between 365D, 52W, 12M, 1Y in stock market? Does holiday ...
7
votes
1answer
19k views

What's the difference between a certified check, a cashier's check, a money order, and a bank draft?

The question comes from reading this answer. I've heard these terms used somewhat interchangeably, but I have no idea what the differences are. What's the difference between a certified check, a ...
1
vote
5answers
5k views

Best way to invest money as a 22 year old?

I currently have a small sum of money of less than $1000, but will be reaching greater than $1000 over the summer due to a summer waiter job. I have been reading about the stock market, but so far I ...
2
votes
1answer
165 views

Making Sense Of This Sentence

Some random browsing brought me to the Wikipedia page on Financial Independence, and I'm having trouble making sense of something it says. Below is the whole extract, provided in full to make it easy ...
7
votes
3answers
232 views

Do Credit card companies only process your transactions or pay for them?

Or do they actually pay for your transactions using money they've borrowed from the issuing bank ? ie, is the bank lending the credit card holder the money or is the bank lending money to the credit ...
1
vote
1answer
64 views

How are options traded on exchanges priced?

First, my knowledge is limited and I am still learning. I understand that each bank has various models to price options and that the prices vary based on these models. If this is the case, how are ...
17
votes
9answers
9k views

If stock price drops by the amount of dividend paid, what is the use of a dividend

I have heard that some people buy stocks based on how much dividend they pay, because dividend is considered 'income'. But if I buy a stock for 100$ and it pays a $1 dividend, the stock would also ...
5
votes
5answers
840 views

Where does the money go?

I've studied the derivatives market, and I've heard of a number of huge losses by firms; I've heard of individuals forewarning against investing in this market. I never hear about the big winners. ...
2
votes
2answers
2k views

How do dividends of the underlying security in a security futures contract affect the security futures price?

I would assume that increases in any dividends would increase the price of the underlying security, therefore causing a relative increase to the security future price. Or is this relationship more ...
6
votes
3answers
1k 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?
1
vote
1answer
127 views

How do stock analysts estimate the earnings for a publicly traded company? What about costs?

I assume that if one was a careful study of a company, you could determine revenue by surveying consumers and determining how much inventory is being sold, but I don't see how an analyst could gain ...
2
votes
1answer
141 views

Do I pay bid-ask spread if I trade on NYSE

From what I understand from this MM vs specialist discussion , the job of the specialist is to bring buyers and sellers together as opposed to a market maker who buys from the seller and sells to the ...
2
votes
3answers
667 views

Equation to determine if a stock is oversold and by how much?

Given a stock, is there any mathematical equation than can determine if that stock is oversold? I will use the equation against all stocks in the market to generate a sorted list of oversold stocks.
0
votes
1answer
79 views

Buy/Selling prices at the stock exchange represent someone Selling/Buying at that price?

I see in my trading system two price quotes for a stock. Buying and Selling. Does the buying price means that it is the lowest price someone is currently attempting to sell their stock? If so, then ...
3
votes
2answers
242 views

How to read a mutual fund spec sheet?

I am attempting to invest money in mutual funds for the first time ever but honestly I have no idea how to figure out what is good and what's bad. I've seen sites recommending to look at the fees and ...
-2
votes
1answer
52 views

How is a stop order price different from an ask price

If I buy a stock for 40$ and the best current ask is 41$. And let us say I put a stop loss at 35$. Now by putting a stop at 35$, am I not basically saying that I am willing to sell this stock for 35 ...
1
vote
1answer
98 views

What do “yield type” and “duration” mean in this table of bonds?

In this table of bonds, what do the columns "Yield Type" (values e.g. "C", "M") and "Duration" mean? I thought "Duration" would be the number of years to maturity, but the values seem to be something ...
2
votes
2answers
125 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 ...
7
votes
3answers
2k views

Why is a stock dividend considered a dividend? What makes it different from a stock split?

I've been reading Principles of Corporate Finance by Brealey, Myers and Allen, but unfortunately they did not cover stock dividends. From what I understand, by paying a dividend, a company can ...
4
votes
1answer
191 views

Can I get a dumbed down explanation of risk measures used for evaluating stocks?

Hoping this will be a good reference question for the site. Can someone explain in a way that doesn't require a lot of math/statistics background what the following terms mean when analyzing the ...
-4
votes
1answer
98 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
3answers
343 views

What am I actually buying when trading in CFDs

Ok, so I'm trying to figure out what is actually happening when I'm trading in CFDs (Contract for difference). Investopedia says: This is generally an easier method of settlement because losses ...
3
votes
2answers
164 views

Why would a stock opening price differ from the offering price?

I've noticed when a stock goes public (IPO) there is a stock offering price. The opening price on the first day of trading is sometimes higher/lower than the offering price. How can this be? Am I ...
2
votes
2answers
74 views

Clarify on some Stocks Terminology

For the volume of a stock that is listed on, www.finance.google.com, what kind of measurement is that? Is that the number of shares that were traded? or something else? On the CNBC ticket screen, ...