Questions tagged [financial-literacy]

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

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2
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2answers
276 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 ...
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1answer
25 views

Price of a share's futures

Is the price of a share's future contract in the secondary market dependent on supply demand of the share in the secondary market or is it also influenced by the supply demand of the future's contract ...
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1answer
61 views

Can I use the money I obtained from shorting a stock? [duplicate]

If I were to short a stock currently valued at $100, I understand that $100 would be placed into my margin account. Can I use that $100 to purchase stocks?
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14answers
9k views

Hypothetically, should I pay off the smaller + higher interest rate loan first, or the larger + higher absolute interest cost?

I have this hypothetical situation on my mind and I am not sure which is the best solution. Given: Loan 1: $340,000 at an interest rate of 1.69% per year Loan 2: $40,000 at an interest rate of 3.6% ...
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1answer
87 views

What does it mean for the “Feds” to step in?

In several stock market crashes in the US including the recent Covid crash in March and the financial crisis in 2008 it was said that the Feds had to step in and save the economy. There was an ...
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1answer
42 views

How does a specific share having intermediate owners during a time period affect volume?

Take any public company on an exchange. On this exchange, Person A sells one share of this company to Person B for $X, then Person B sells the specific share he bought from Person A to Person C for $Y....
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0answers
28 views

How Do Collateralized Loan Obligations (CLOs) Work?

I am trying to understand, in its simplest form, how the collateralized loan obligations (CLO) work. I refer to an article in the Atlantic for those who are interested in learning about CLOs. The way ...
2
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1answer
48 views

What does a large negative “Insider Transactions” mean (finviz)?

What does a large negative "Insider Trans" on finviz.com mean? In general, does it mean that the stock is not worth buying now? For example: The Zoom Video Communications stock is very ...
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2answers
76 views

Stocks with buyers only

I have Alok Industries stock NSE in my portfolio, everyday it increases by a fixed percent 4.95 and moneycotrol websites states everyday that "buyers only". What's the matter and will I face ...
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1answer
32 views

What do I need to know in order for a US citizen to open a custodian brokerage account in Canada?

I need to open custodian brokerage accounts for my 2 Canadian grandchildren, ages 16 and 13. As a US citizen, I am willing to tie them to a US savings account in USD. What is the best way to do that ...
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4answers
3k views

Universal Life Insurance or Term Life Insurance?

I am new to this website and asking for your help with a situation related to my personal finances. I have a friend who recently joined WFG (World Financial Group) and they were asking for me to join ...
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2answers
331 views

What are the different methods for budgeting?

I've always used the envelope method to budget. I know Mint uses a different method, but I'm not sure if it has a name or not. It could simply be a derivative of the envelope method. Wells Fargo's ...
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2answers
119 views

What determined the “cost of borrowing money” or the interest rate in a gold-based economy [closed]

In the modern economy, the central bank decides the cost of borrowing money using interest rates along with other several tools and technic. But I was wondering, in a gold-based economy (not the gold ...
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2answers
74 views

If the only value in a share (excl. dividends) comes from owning part of a company (and few own enough) then why are stocks valuable? [duplicate]

Sorry if the title is a little vague, let me be more precise. This post says that the value in shares comes from: The dividend payout Voting rights Owning part of a company, therefore receiving ...
2
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2answers
276 views

Invested 600 , now cot is required to release payments

I invested 300 with this company Called CRYPTOPAIDOPTIONS and Option Flix. My concern is they are asking for cot to be sent to them before sending my payout . While another company name Alis Capital ...
0
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1answer
156 views

Bank financing vs. Owner Financing (Dan Pena QLA, Company Acquisitions)

I have a question about small detail in QLA program from Dan Pena about company acquisitions and business loan lending in general. My question is related to the 03:45 (minute:second) moment of the ...
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7answers
3k views

What is the opposite of a sunk cost? A “sunk gain”?

Here's an example of the sunk cost fallacy: You decided to buy a solar panel because you heard that you can make money from them over time. Unfortunately, you didn't do enough research and bought an ...
0
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1answer
44 views

What are the non current assets in a balance sheet?

In order to know if companies are conservatively financed I query an API that gives me the financial information. Yet when if the information it gives for the current assets, I can't understand what ...
2
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4answers
504 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 ...
0
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2answers
33 views

Is the operating Income or Loss the equivalent to TOtal revenue for wealthier companies?

I have noticed on yahoo finance that some companies like this one don't have total revenues in their financial table but rather an Operating Income or Loss and a Net Income. Is it the same ? Can I use ...
0
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0answers
17 views

How can I weigh profit sharing against STAK/COOP shares?

Currently I work for a company consisting of around 15 people based in Europe. As a full time employee I receive a 1% profit sharing at the end of the year. At the beginning of this year we received ...
0
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3answers
318 views

How Market Price works?

This is probably a very dumb question but I don't get it. Usually people say if there are more buyers then the price goes up, and if there are more sellers it goes down. Why is that? And in which ...
11
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1answer
22k views

How do wire transfers get settled?

Say I open accounts on Bank A and Bank B. I deposit $20 in Back A. I then initiate a wire transfer to my account in Bank B. I drive over to Bank B and withdraw $20. Bank A now has $20 extra and Bank ...
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3answers
3k views

What's difference between LIMIT and STOP orders for entry?

After re-reading the descriptions same and again, I can't clearly say, what's the difference between STOP and LIMIT orders actually. example: i.e. Stock price is at 5.60, and I want to trigger ...
11
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10answers
50k views

Why are American-style options worth more than European-style options?

Why are American-style options worth more than European-style options? I realize I can exercise American-style options anytime before the expire, but I can only exercise European-style options ...
3
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0answers
74 views

Equity cannot be redeemed at the option of the holder

I was going through Tier 1 Capital on Investopedia. I came across this note a couple of times in the article. Equity capital is inclusive of instruments that cannot be redeemed at the option of the ...
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2answers
159 views

How to interpret negative bond yield quote

I am trying to understand investing in (non-us) government bonds. Looking at data I can find online regarding the bonds available in my broker is giving me information I can't make sense of. For ...
2
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2answers
77 views

With a 401k, can I sign up first, and then switch to different investment types and buy/sell them later?

For example, our company's 401K has an easy choice of "BlackRock US index fund" (for Dow Jones 30 DJI) using Fidelity, and does not require opening a broker account. Should I just start using the ...
1
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1answer
258 views

How To Calculate Daily Volatility?

I'm working in SQL Server and I'm trying to find the daily volatility of a stock's price. Is it simply day2price/day2price-1? Is that considered daily volatility? Or, is there something else to it? ...
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1answer
61 views

Understanding the term “open position”

The investopedia page on open position states that: The recommendation for investors is to limit risk by only holding open positions that equate to 2% or less of their total portfolio value I am ...
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2answers
57 views

Market Cap Calculation Based on Yahoo Financials

I am trying to calculate market cap based on outstanding shares and stock price for AAPL. I go to Yahoo Finance, https://finance.yahoo.com/quote/AAPL/balance-sheet?p=AAPL Quarterly view for 2019 Q4 ...
53
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6answers
25k views

How can a company use money from stock investors when they are constantly being bought and sold?

I am interested in the mechanisms which a company can use the money that investors give them when they buy a public stock since they are being bought and sold constantly. How can a company spend other ...
0
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1answer
43 views

Is it possible to calculate share price previous to stock split based on adjusted close price?

The price of NSE:HDFCBANK was around Rs. 2K+ before it split on 19-Sep-2019. I am using AlphaVantage to get stock price for NSE:HDFCBANK. It does not show the stock price before stock split as Rs. 2K+....
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0answers
23 views

Questions about Financial ratio

I am doing some tutorial questions about financial ratio and encounters some problems that I would like to share in this forum. Why we use Profit AFTER Interest & Tax as numerator in Return of ...
3
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1answer
81 views

What determines the interest rates of government bonds?

It's not clear to me how the interest rate of a specific government bond changes. I would like to make a comparison with cryptocurrency exchanges. Consider, for example, the price of bitcoin on ...
36
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4answers
66k views
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2answers
108 views

How has the modern era of low dividend paying index affect the principles of compound interest?

From my understanding: *To keep it simple, we will keep the asset as index S&P500, not including asset allocation. Compound interest (or compounding interest) is interest calculated on the ...
0
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1answer
66 views

Why does private equity have a higher fee structure than public markets?

I'm trying to understand why private equity tends to have higher fee structures than public markets. My hunch is that it takes more skill/risk to manage illiquid assets. I'd also imagine more due ...
6
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1answer
9k views

What does negative Total Equity mean in McDonald's balance sheet?

What does negative Total Equity mean in McDonald's balance sheet? Please refer to https://finance.google.com/finance?q=NYSE%3AMCD&fstype=ii&ei=3ZDCWaDdFcyauATPnb6wBg For "Total Equity" row, ...
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5answers
234 views

What do we know about elementary financial education at highly ranked schools at the pre-college and early college levels in the US?

Several answers and comments have postulated ignorance of the most basic financial features, for example, a total misapprehension of "marginal tax rate". See, for example, the comments under the ...
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2answers
330 views

Why buy and sell shares when a friendly takeover is underway?

I have recently had a... fairly reasonably priced lesson not to just buy the next stock on my "to buy" list at the face value. Namely, there was a friendly takeover going on so the stock price was ...
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1answer
123 views

Money zellied to me with bank confirmation then boa riskmanagement

I recently opened a new account with Bank of America, where I haven't had an account in about 10 years. I needed help fixing my car so my mother sent me money via Zelle and I got a confirmation ...
2
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2answers
2k views

Understanding a Trailing Limit if Touched Order

I"m trying to wrap my head around a Trailing Limit if Touched Order that is offered by Interactive Brokers. The order explanation is at Trailing Limit if Touched. What I'm trying to figure out is ...
19
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1answer
4k views

What does “gross of” mean?

I'm reading a financial report summary of an investment and it says "The numbers below are presented gross of fees." Does that mean the numbers include fees, or don't include fees? Why don't they ...
1
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1answer
61 views

What's the meaning of “The agent quotes the bid price …”?

I'm studying an article about High-frequency trading. I'm very new at financial market so maybe my question is very simple. In the article writers said "The agent quotes the bid price...". What's ...
5
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3answers
627 views

How can someone own only a part of a share of stock? Are the rights any different with a fractional share?

A friend told me, he is able to buy parts of a share. So he does not buy one or two shared but one and 1/5 of a share (1.20). Is this a benefit from the digital age? Because in the past, when shares ...
3
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3answers
5k views

Increasing PE ratio good or bad?

Some stocks like sbux, and nke have continuously increasing PE ratio. Is this a sign of company doing well or a bad sign that company is slowly getting overvalued ?
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5answers
171 views

Number of shares

How did a company decides the number of shares for its IPO? For example when SNAP went public, it planned to sell 230 million shares. The question is how did it get to these many numbers of shares?
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2answers
444 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 ...
5
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2answers
307 views

Why would a public company not initiate secondary stock offerings more often?

What prevents a company from doing secondary public stock offerings on regular basis? What are the cons of initiating secondary offerings other than the negative impact on stock price (at least in ...

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