Questions tagged [financial-literacy]
for questions related to understanding basic concepts in finance or certain terms in a particular context
646
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Is 95% of what you read in the financial press “either wrong or irrelevant?”
From a Cato Institute article by Steve Hanke1 (emphasis added):
Most press reports about Zimbabwe’s fantastic hyperinflation are off the mark – way off the mark. Even our most trusted news sources ...
- 3,850
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4
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What is an appropriate metric measure average annualized rate of return for an average investor?
Let us say an investor invests $X per year for N years. Let us say the final portfolio value is $Y. In this scenario, how should I measure a metric that quantifies "average annualized return"?
I ...
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14
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How can I support myself financially as a 17 year old with a loan?
I'm a 17 year old Ohio high school student who makes ~$160 a month working minimum wage. I have a $3500 loan (4 year duration) to pay off for a car with ~$2880 left.
Monthly payments are ~$80 for ...
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2
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1
answer
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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 ...
CommunityBot
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2
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How can I tell what is "real" Motley Fool advice? [duplicate]
I clicked on a link and was taken to a video, which troubled me a bit and is a bit different from what I expect of the Motley Fool, of which people have presented as offering advice like "Live below ...
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1
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1
answer
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Bond prices changing due to interest rates
I feel as if I'm missing a fundamental step here. I'm aware that bond prices fall as yields go up; but what makes yields go up?
If I had a bond issued in the UK for example, and the base rate went up ...
- 31.7k
1
vote
1
answer
498
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What is "corporate drag"?
What is meant by the term corporate drag? Have seen this in some valuation analyses associated with a numerical cost value, but googling terms like "corporate drag" or "corporate drag value" do not ...
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2
answers
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How to calculate the payback period when income is reinvested? [closed]
Could someone please show me how to calculate the payback period with compounded interest? So if I had a initial investment of $100, paying 1.5% interest annually that is reinvested, how do I ...
- 3,572
3
votes
2
answers
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Am I looking for a financial advisor?
I am a recent college graduate and have just started my career. The company I work for has benefits such as 401(k) which I have signed up for. I have some student loan debt and I am looking for ...
- 4,609
3
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2
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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.
- 9,797
4
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1
answer
726
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What is a "Subscription Rights Offering" of a stock one owns?
Last week a funny thing popped up in my little "play" brokerage account (where I own <100 shares of some stocks that trade below $5.00). A second line appeared below one of my stocks ...
CommunityBot
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3
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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 ...
- 1,523
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2
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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 ...
2
votes
3
answers
218
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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-...
- 31.7k
0
votes
1
answer
382
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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 ...
- 31.7k
2
votes
2
answers
193
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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 ...
- 22.7k
4
votes
1
answer
210
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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:...
CommunityBot
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3
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3
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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 ...
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48
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1
answer
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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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2
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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 ...
- 3,572
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2
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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 ...
- 76.4k
1
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2
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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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2
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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
votes
1
answer
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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 ...
- 57.1k
3
votes
1
answer
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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 / ...
- 140k
1
vote
4
answers
200
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What causes market-wide trends?
What cause market-wide trends in general, rather than company-wide trends?
- 121
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votes
2
answers
10k
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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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1
answer
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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?
- 57.1k
21
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2
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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 ...
1
vote
2
answers
211
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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 $1002, and then I sell the stock,
Do I need to ...
- 22.7k
-1
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1
answer
2k
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Can debt increase ROE?
I have the following statement which can be true or false.
A company with operational rentability (EBIT/Assets) of 11% (after income tax of 30%) analyses taking debt. If the credit consists of 16% ...
- 135k
3
votes
4
answers
184
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Does selling index fund shares for the same amount the account grew by reduce the account's value?
I've been thinking about what retirement looks like, and I'm trying to figure something out. Let's say I have a sum invested ($Y) in an index fund that grew by 60k in 12 months, for a total value of $...
- 57.1k
0
votes
1
answer
1k
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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?
- 261
2
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1
answer
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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 ...
- 7,566
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2
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238
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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 ...
- 13.8k
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2
answers
4k
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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?
- 11
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4
answers
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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 ...
CommunityBot
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7
votes
3
answers
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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 ...
- 76.4k
0
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1
answer
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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 ...
- 76.4k
1
vote
1
answer
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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 ...
- 13.2k
4
votes
3
answers
4k
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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, ...
- 76.4k
11
votes
2
answers
555
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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 ...
- 76.4k
4
votes
1
answer
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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 ...
- 76.4k
2
votes
4
answers
803
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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 ...
- 76.4k
1
vote
2
answers
103
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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 ...
- 76.4k
2
votes
2
answers
380
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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"?
- 76.4k
5
votes
1
answer
586
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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 ...
- 76.4k
11
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4
answers
10k
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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 ...
- 76.4k
-1
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1
answer
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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
- 76.4k
2
votes
1
answer
501
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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 ...
- 76.4k