Questions tagged [financial-literacy]

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

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3answers
296 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 ...
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2answers
38k views

converting annual interest rate to monthly when compounding frequency known

Just like the title I'm looking for the formula to convert APR to monthly when I also know compounding frequency eg APR is 8% and being compounded daily what is the monthly interest rate I earn. Or ...
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3answers
97 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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1answer
245 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 ...
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2answers
145 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 ...
3
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1answer
204 views

How to approach fixing parents personal finances? [closed]

I'm posting this today to get some advice in case anyone here has dealt with anything similar. I'm including some background because it plays into the situation (i.e. cultural differences) Background:...
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3answers
371 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 ...
46
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1answer
6k 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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1answer
6k views

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

I was wondering, what does negative Total Equity means in McDonald's balance sheet? Please refer to https://finance.google.com/finance?q=NYSE%3AMCD&fstype=ii&ei=3ZDCWaDdFcyauATPnb6wBg For "...
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2answers
138 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 ...
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6answers
4k views

Why do people still write checks as payments in stores?

Why do we still see (edit: in the US) some people (especially the elderly) still pay with checks in stores, even when the amount isn't too large for a debit card? Here are the disadvantages I can ...
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2answers
87 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 ...
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2answers
210 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 ...
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2answers
133 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 ...
11
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1answer
675 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
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1answer
107 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 / ...
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4answers
134 views

What causes market-wide trends?

What cause market-wide trends in general, rather than company-wide trends?
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2answers
8k 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?
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1answer
44 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?
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2answers
33k views

I have Sprint shares. What does this merger with T-Mobile mean for my shares?

Over the weekend Sprint and T-Mobile announced again that they would try to merge. Assuming the powers that be in the US don't have any issue with this deal and it moves forward as proposed, what ...
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2answers
199 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 ...
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1answer
600 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% ...
3
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4answers
168 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 $...
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1answer
262 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?
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1answer
84 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 ...
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2answers
217 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 ...
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2answers
208 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?
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4answers
196 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 ...
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3answers
925 views

The proper term for a third party economy [closed]

A friend of mine asked me whether something odd was going on, including the following picture: Basically, the companies listed (Bitcoin, Uber, Facebook, Alibaba and Airbnb) sell a service in a market ...
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1answer
59 views

Venturing into Investment Market [closed]

What are some of the noted and best books which cover the basics of Stock market, Forex, Bitcoin investment and other investment concepts and provide expertise and in-depth knowledge of the same? Also ...
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1answer
65 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 ...
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3answers
2k views

Calculate time to reach investment goals given starting balance?

I'm sure this has already been asked, but I've had difficulty finding the answer by searching. Most investment formulas I've found explained don't include a starting balance. Given payment size, ...
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2answers
515 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 ...
4
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1answer
1k views

What do the suffixes on stock symbols indicate

For example, this article mentions symbols VZ.N, CVC.N, TWC.N, and CCOI.O. Are these related to share classes and/or warrants? Each of these symbols also seem to exist and can be referenced without ...
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4answers
678 views

Why does ExxonMobil's balance sheet show more liabilities than assets?

In analyzing balance sheet of ExxonMobile, based off of Yahoo Finance report, we run into the following figures for the year: Current Assets: 51,647,000 Total Liabilities: 175,592,000 Now Current ...
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2answers
89 views

Bed Bath and Beyond: Q1 or Q2

Why do the news releases say that Bed Bath and Beyond released its Q1 earnings. Shouldn't it be Q2 earnings right now? On Yahoo finance, it says the recently released report was Q2 but BBBY says that ...
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2answers
128 views

Volume of S&P500

According to the page on Yahoo Finance, the volume of S&P 500 is 1,813,371,531. What is the meaning of this "volume"?
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1answer
457 views

Why do passive ETFs require so much trading (and incur costs)?

As far as I've understood, the idea of passive ETFs is to track an index. Typically, the index is a value-weighted stock market index, such as the S&P500. Now, if I'm not mistaken, tracking a ...
11
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4answers
3k views

Why do people rarely execute options?

Options have recently sparked my curiosity as you can short a stock with a put option and only risk your premium (as opposed to shorting in a margin account) but I still have a few questions. Why do ...
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1answer
297 views

What does this mean? SELL -10 VERTICAL $IYR 100 AUG 09 32/34 CALL @.80 LMT

can someone please explain what does this quote mean? SELL -10 VERTICAL $IYR 100 AUG 09 32/34 CALL @.80 LMT what is Vertical what is -10 what the 32/34 stands for? what is LMT
2
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1answer
244 views

Difference in Value between General American & European Options

I am trying to get a grip on the difference in value between American and European options. I have read up on and understand that the value of an American call option is equal to that of a European ...
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2answers
1k 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 ...
11
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9answers
43k 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 ...
0
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1answer
104 views

In option pricing formulas, is the volatility and short rate a decimal or a percentage?

In the BS option pricing formula, when entering values for volatility and short rate, do we enter them as percentages or decimals? Take the time unit to be a year, i.e. if we want to price something ...
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3answers
308 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
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1answer
136 views

What is a call spread and how does it work?

First let me apologize in advance, I am an amateur in this world at best, and my terminology is a little weak. However this phrase "buy/sell a call spread" seemed pretty light on description every ...
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2answers
53 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 ...
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2answers
277 views

What is a straddle?

I have heard the term straddle when referring to options many times. What would it mean if I wanted to enter into a straddle position?
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1answer
356 views

What is the difference between a structured collar and a normal collar in finance?

How is a structured collar different from an ordinary collar? I failed to find information about the difference online.
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1answer
118 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: http://www.investopedia.com/terms/p/...