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Questions tagged [financial-literacy]

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

3
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2answers
134 views

Balloon Payment on a Mortgage

How do I calculate the balloon payment on a 30 year mortgage with an APR of 7.8%, where the balloon payment must be made after 8 years.
1
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3answers
155 views

What jobs to gain knowledge on finance? [closed]

I don't have former experience or education on finance, but I want to find a job in finance so I can gain more knowledge about it to help secure the future financially. I have a strong background in ...
1
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3answers
65 views

How does a bond's coupon rate differ from its market yield rate?

I'm trying to understand how bonds work and am confused by coupon rate vs market yield rate. Suppose company Foo issues a bond with a face value of $1 million, a 4% annual coupon rate payable semi-...
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0answers
54 views

The share price: buy vs. sell? [duplicate]

I am new to trading and I would like to ask how to know the price of a stock? For example, in buy it is 7108 and sell it is 7101. How to know the share price or the amount of dollars that I will give ...
0
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1answer
113 views

Fed's interest rate vs. effective rate?

I'm trying to understand the "Fed interest rate". Wikipedia says: "Financial institutions are obligated by law to maintain certain levels of reserves... The bank can borrow the requisite funds ...
0
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2answers
89 views

Balance transfer fee

I am getting my first credit card ever and I am trying to learn how it works. I got through most of the documentation but I am trying to understand this: 0% Intro APR for 15 months from account ...
44
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1answer
5k views

Numbers in parentheses in financial statements?

In financial statements numbers are sometimes given with parentheses around them, while other numbers appear without parentheses. What does it mean if a number is enclosed by parentheses?
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2answers
82 views

Investments for Higher Expected Returns

In general, investments carrying more risk and volatility provide higher expected returns than those with lower risk and volatility. A 1-year T-note will provide a guaranteed return of 2.6%, slightly ...
0
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2answers
76 views

How exactly does a broad-market ETF work?

So it's obvious that a broad-market ETF attempts to imitate the performance of the whole stock market, but what I still don't understand is how it works and exactly what you are investing in when you ...
0
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2answers
185 views

How are micro-finance banks able to offer interest rates so much higher than traditional banks?

Recently while browsing on google I came to know that there are few small-finance banks which offer great returns with the high amount of interest rate up to 7% and fixed deposits up to 9-9.5%. like ...
11
votes
1answer
479 views

Why can unissued capital stock exist?

Unissued capital stock allows a company to issue shares at any given time, diluting the ownership of current shareholders. This does not seem logical nor fair. At any given time, shouldn't 100% of the ...
3
votes
1answer
79 views

P/E as market capitalization / net income

Price/earnings ratio is defined as: P/E = Share Price / Earnings per Share If we multiply both the numerator and the denominator with the number of shares, we get: P/E = Market Capitalization / ...
1
vote
4answers
119 views

What causes market-wide trends?

What cause market-wide trends in general, rather than company-wide trends?
1
vote
1answer
41 views

Is all of put option time value when OTM?

If I sell a Dec 65 strike put on 12/3 and on 12/7 the stock price is at $74 and the put bid/ask are .35 x .37, how much of that is time value?
1
vote
1answer
88 views

Investing platform options without fixed residency

Background: My wife and I are in our high-twenties currently living in UK. We don't have a mortgage, we're renting our flat. The only debt we have is the standard UK student loans, which is deducted ...
1
vote
2answers
186 views

Short-term selling of stocks with less profit

If I purchase $1000 worth of stock, and in the first week the stock value goes down to $900 and then in the second week the value of the stock reaches $1002, and then I sell the stock, Do I need to ...
0
votes
2answers
112 views

Do SPY returns include dividends?

Looking at a chart of SPY on finance.yahoo.com from March 1 - Nov 30, 2018, it returned +1.67 (+0.61%). Does the +0.61% include dividends? Looking at the historical data, dividends are displayed ...
2
votes
1answer
51 views

Understanding the FTSE Actuaries Share Indices on the Financial Times Paper UK

I am trying to understand how to read the Financial Times FTSE Actuaries Share Indices UK. In two of the columns it says Cover and Exadj. Cover is between Dividend Yield % and P/E ratio. Exadj is ...
-1
votes
1answer
106 views

Can debt increase ROE?

I have the following statement which can be true or false. A company with operational rentability (EBIT/Assets) of 11% (after income tax of 30%) analyses taking debt. If the credit consists of 16% ...
0
votes
1answer
168 views

Meaning of “rat race” in the book of Rich Dad Poor Dad? [closed]

I want know what exactly rat race is and why most of the people fall into that trap?
2
votes
2answers
208 views

What is the difference between “trading in stock” and "investing?

I have no finance background and most people are saying trading in stock is not investing. I would like to know what actual investing is and if trading in stock is not investing. Then what are ...
0
votes
2answers
195 views

As a teenager, what's the best way to learn about investing? [closed]

I'm a 16 year old from India who wants to learn the basic principles of investing in order to secure a better future for myself. I've been reading quite a bit on various websites but those that I ...
0
votes
4answers
188 views

Flash Boys: “That was the tax”

I am reading Flash Boys by Michael Lewis, and I am very confused by one passage. On page 52 in my copy, they mentioned that their investment let them escape taxes. I am utterly confused how that ...
2
votes
1answer
71 views

Where do Master Limited Partnerships (MLP) lie on the risk/yield spectrum?

MLPs are required to pay profits to their limited partners. Dividend stocks can choose to stop paying dividends. Corporate bonds payments are fixed interest (a set number) but MLP payments are usually ...
1
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1answer
57 views

Should I create a personal income and expenditure statement at the time of being student with no source of income?

Many of the students in higher education level do not have a source of income like me and have daily, monthly and quarterly expenses of amount they get from their family, sponsors or scholarships. I ...
2
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2answers
92 views

Cash Transaction For Real Estate or Otherwise

When a seller of property of significant value or even an expensive exotic car requires a "cash purchase", possibly amounting to millions, is that actual cash - meaning buyers are hauling around ...
0
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2answers
119 views

What would be my Indian Income Tax if my salary is 15 lacs per annum

This is one topic which has always puzzled me to no end. No matter how hard I try to understand it, I always do not seem to grasp the concept. I'm currently considering an offer and would like to ...
0
votes
1answer
132 views

Bond sell off vs stocks

U.S. stocks fell following a bond selloff that sent yields to multi-year highs. New filings for unemployment fell unexpectedly to near 49-year lows. The benchmark 10-year U.S. Treasury yield rose ...
1
vote
1answer
97 views

What is payment period, and why is it equal 100 in this mortgage table?

Here’s the table: I think the payment period is a month, but I don’t understand why it’s 100. The image is taken from this Excel exercise: http://web.utk.edu/~dhouston/excel/exer3.pdf
3
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2answers
403 views

Does FDIC insurance at one bank cover each account?

I was reading that FDIC insurance covers accounts up to $250,000. Does this mean each account you have at a bank is insured up to $250,000 or is $250,000 the maximum for all accounts at a bank? Also,...
3
votes
4answers
153 views

Does selling index fund shares for the same amount the account grew by reduce the account's value?

I've been thinking about what retirement looks like, and I'm trying to figure something out. Let's say I have a sum invested ($Y) in an index fund that grew by 60k in 12 months, for a total value of $...
2
votes
3answers
332 views

Why would a lender raise interest rates if you are in danger of not being able to pay your loan?

This is a follow-up to this question. It is established that lenders charge higher interest rates to customers less likely to be able to repay their loan in full, but this increased rate shouldn't ...
0
votes
2answers
513 views

Why hold calls until expiration?

I am reading a book on options basics. I am in a chapter on selling covered calls. The author says that buyers of calls almost always hold the calls until expiration. Why is this? Here's how I ...
1
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2answers
166 views

Options when go private

What happens to options when a company goes private. For example, if I have a call option on Tesla right now and it goes private at 420/share, what will happen to my options?
93
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9answers
22k views

When someone's ability to pay is suspect, why would it make sense to give them more expensive credit?

Answers to the recent question "Why don't bond makers just get loans?" Seem to take it as a given that lending someone money at a 12% interest makes sense when there is already doubt about their ...
0
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2answers
104 views

Help me understand TradingView watchlist data

I'm trying to figure out what is the meaning of the percentage value (comparing to 24-hours before?) and the small last digit?
24
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4answers
7k views

My out-of-the-money call options are near expiration and won't sell in the open market. What are my choices?

I had attempted to sell my contracts off today but was unsuccessful. They are currently OTM options and will expire tomorrow. What can I do to minimize loss and why was I unable to sell?
0
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3answers
184 views

Does short selling create additional share in the market?

Let's say that I short-sell 1 share that A lent to me and B immediately bought from me. Doesn't this create additional share in the market because A will see it as "lent out" in his bank account and ...
2
votes
2answers
135 views

Partially vs. Fully Amortized Loan

Isn't the article beneath wrong to interpret a Fully Amortized Loan as a loan with 7 years maturity? Isn't the correct comparator a Fully Amortized Loan with 30 years maturity, and 30 years ...
0
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2answers
85 views

Short term dividend payout [duplicate]

I read that as long as I hold a stock for two business days, I will get a dividend? What if I make multiple trades for one stock. For example, if I buy 20 shares and sell 20 two days later, then I buy ...
1
vote
3answers
450 views

Foreign money comes to my account

A foreign friend wants to help me by transferring money to my savings account. I got an email from RBI telling me go for online procedure through a link. After completing 3 out of 2 steps, asking me ...
1
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1answer
61 views

Indian Mutual Funds

I am new to Stock Markets. I have interests to invest my savings on Mutual Funds. When I looking for Higher Return Mutual Fund securities, I have seen some information there. For Example, I am ...
0
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1answer
113 views

What is LEVERAGE SHARES PUBLIC LIMITED COMPANY LEVERAGE SHARES 2X FACEBOOK ETP (FB2)

I was looking into buying FB shares and discovered something called 'LEVERAGE SHARES PUBLIC LIMITED COMPANY LEVERAGE SHARES 2X FACEBOOK ETP (FB2)' . What is this and how does it relate to the usual FB ...
0
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2answers
47 views

Bull call spread

My textbook says the following for a bull call spread. "In the bull call spread, you sell a call with a lower strike price and buy a a call with a higher strike price. The call spread is a credit ...
0
votes
1answer
118 views

Why do CDO's have a reinvestment period?

If CDO's collect all the cashflows from their underlying assets and then pay them out to the CDO investors whats the need for a reinvestment period? and where is the principal that is being reinvested ...
1
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1answer
50 views

Meaning of 10-year treasury note price change

At this moment, WSJ quotes 10-year T-note as below: Price: $100 3/32 Price change: -2/32 (-0.08%) Question 1: Where does the -0.08% change come from? To me, it seems the old price is 100 5/32. ...
2
votes
1answer
1k views

Can I short a stock for a long amount of time?

The next recession is inevitable, if what I read is to be believed. Whether it happens tomorrow, or in 10 years, it's coming. Why shouldn't I short many stocks, and hold on to them for whatever ...
0
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2answers
117 views

What is option execution?

What is the meaning of "the execution of the Option" or "Option execution" in the examples below? Is it "signing"? The Completion, as well as the execution of the Option may be carried out if on ...
6
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2answers
369 views

What does the “OTC” stand for

Where do you buy "OTC" stocks,I may be naive but OTC means over the counter. I am confused as to where to purchase such stocks ?
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2answers
168 views

How do stocks rise?

If a stock shows great performance on the income statement, will the prices rise gradually or immediately after the release of information to the public?