Questions tagged [financial-literacy]

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

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17
votes
2answers
1k views

Can someone explain the different kinds of annuities?

So in my retirement and personal investing I have some stocks (very little), a Roth IRA, a Roth 401K and a Traditional 401K (later two are from work and I split things right now). At my age and ...
2
votes
1answer
4k views

What is an “undervalued” or “overvalued” bond?

Here's a small excerpt from Bond Valuation section on Investopedia: Determining Whether a Bond Is Under or Over Valued What you need to be able to do is value a bond like we have done before ...
124
votes
13answers
21k views

Why does gold have value?

I'm curious about why is there so much financial interest and news coverage about gold. It's hard to do things like buy food or pay the rent with gold, but I can do this with cash. Gold doesn't yield ...
5
votes
5answers
2k views

What marks the beginning of a bear market?

I continue to hear that our "aging bull market" continues to plod along, but the indices are falling relative to their high point in late January. What is the metric by which one determines the ...
32
votes
7answers
20k views

Bought stock at higher price than current price

I wanted to buy stock ABCD at a price of 880. The current price was 900. When I bought, I set 980 instead of 880 and it was fully executed. I don't understand how it is possible to buy stock at a ...
2
votes
1answer
151 views

Notice of Conversion for 3(a)10

I am trying to figure out what this means. Is this good or bad? http://markets.businessinsider.com/news/stocks/metrospaces-announces-that-it-will-not-honor-notice-of-conversion-for-3-a-10-due-to-...
0
votes
2answers
73 views

How are buys executed? [duplicate]

Looking at any given stock, I can see top ten Sellers (cheapest first) and top ten Buyers (highest first). Question is.. does the top buyer buy down through the seller list until satisfied, then buyer ...
4
votes
2answers
491 views

After Hours S&P 500

I know that while major stock markets are closed, many instruments continue trading overnight. I imagine that some of these instruments track the S&P 500. Is there some easy way to follow these? ...
4
votes
6answers
383 views

How to acquire skills required for long-term investing?

Imagine I want to buy shares of companies and hold them for a long time. Ideally, the valuation of these companies and/or the dividends they pay will increase over time. I asked a friend what skills ...
0
votes
1answer
54 views

What is Hosted Staking? [closed]

There are few ICOs are using Hosted staking as a term rather Lending. I want to understand what is this hosted staking and how it works.
18
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2answers
2k views

Special Needs Trust and Financial Planning

update: I may not have explained it clearly in my post below but I don't believe the intent is to close out the 401k or fund the life ins. policy using it. I will clarify with the consultant what the ...
3
votes
5answers
5k views

Is it possible to influence a company's actions by buying stock?

I have a question about shareholder activism. Since the Dakota Access Pipeline has major support by the general population, would it not be possible to buy their stocks, bring down the price of the ...
2
votes
1answer
88 views

Why do so many tools and sites not show total returns of mutual funds?

My understanding that the total return of a fund is the NAV capital return plus the income return (dividends, etc). It seems to me that (outside of tax implications) total return is the most critical ...
5
votes
2answers
288 views

What does “cashes in many of his Enron share options” mean?

I'm studying for an organisational subject and I was reading the following paragraph: August 2001 Jeffrey Skilling resigns after just six months; Ken Lay returns to day-to-day management of the ...
3
votes
1answer
113 views

How to get visibility into contributions to assets

I'm using double entry with Assets, Expenses, Income, Liabilities, and Equity. To illustrate my question with easy round numbers: Income one month is 10k; 5k goes into an asset like a 401k account (...
3
votes
3answers
347 views

Revenue Vs. Earnings

I have been trying to understand the impact of news and earnings reports on stock price, but this one has confused me. Starbucks released earnings on the 25th and came up short on expected revenue but ...
0
votes
1answer
84 views

Negative Balance terminologies

When your CC balance turns negative, then it's an overdraft right? What are the other terms for Negative Balance / Overdraft?
14
votes
4answers
2k views

Why would I want a diversified portfolio, versus throwing my investments into an index fund?

Index funds are well-known to give the best long-term investment. However, most financial planners recommend having a diversified portfolio, including components such as bonds and foreign markets. I ...
2
votes
1answer
71 views

Questions about Multi Exchange Listed Equities

I hold a position in a Canadian oil stock that is on the TSX as well as the NYSE. I read this post: Are stocks only listed with one exchange in one place? but still had some questions Are Multi ...
6
votes
1answer
2k views

Why did a “Bought Deal” Drop the share price of Canopy (WEED)?

Recently a Canadian bank (BMO) has participated in a "bought deal" with Canopy (WEED) for 5 million shares valuing 175 million dollars. The share price went down. Did the share price go down because ...
2
votes
1answer
195 views

Investing and compound interest? [duplicate]

I see lot of information about the power of compound interest and how it can help money grow. I understand the mathematics of compound interest but I have no idea how to take some money and make it ...
4
votes
1answer
101 views

Chained CPI and new tax bill

This morning I heard about how the new tax bill will be using "chained CPI" calculations instead of the traditional CPI calculations, and people seemed to be pretty upset about it. What is "chained ...
188
votes
19answers
27k views

How smart is it to really be 100% debt free?

For the last 2 years, I have been trying hard to be debt free without affecting my personal cash flow. I am by no means a rich person, but I have a decent salary. I still have debt, specifically ...
0
votes
2answers
262 views

Mathematical proof that NPV always negative when rate of return less than discount rate

Can anyone provide a mathematical proof that NPV is always negative when the rate of return is less than the discount rate? That is suppose that we have a single initial input, C0 a constant known ...
0
votes
1answer
139 views

What's the difference between a company's after-tax profit and their sales/revenue?

Two fundamental analysis formulas have got me confused. One is the EPS (earnings per share) and the other is P/S (price/sales ratio). If I understand the formulas correctly, EPS is calculated by ...
7
votes
5answers
12k views

How long does it typically take for a credit card purchase to appear online (even in pending) [closed]

If you've made a purchase online, how long will it take for the purchase to appear in your online account, even if it's just in pending. Clarification: What's the typical and maximum time from the ...
3
votes
1answer
197 views

Who calculates exchange rates?

I was discussing exchange rates with a friend and realized we have a different understanding of how they work. We both understand that floating exchange rates are dictated by market forces (supply/...
0
votes
1answer
84 views

do Convertible bond/note always convert?

This is how i picture convertible notes to work: the company gets a loan from a investor, and pays a certain annual interest. the note also has a conversion price, and if the market price of the ...
1
vote
2answers
104 views

How to pick from several products/services to maximize utility considering the cost of each option?

What is the proper way to consider the utility of a product/service versus its cost in order to make the best rational decision to get the "most for my dollar" if there are several choices for me to ...
-1
votes
4answers
6k views

Buying stocks at one price then buying more at a higher price

If I bought 100 shares at $100 then 2 weeks later bought an additional 100 stocks at a $150, does the cost basis for my original stocks stay the same price of $100?
0
votes
1answer
105 views

Do companies sell new securities before or after a prospectus about the offering?

There wasn't any specific information on when exactly the transactions take place. So are the companies able to engage in the actual sale of the new securities prior to giving the public the base ...
2
votes
1answer
329 views

Could ignoring sunk costs be used to make an investment look more attractive when it's really not?

Could ignoring sunk costs be used to make an investment look more attractive (in terms of NPV) when it's really not? For instance, this is an example of the sunk cost fallacy from Principles of ...
1
vote
1answer
410 views

Why does high frequency trading remove small bid-ask spreads?

"The major benefit of HFT is it has improved market liquidity and removed bid-ask spreads that previously would have been too small." - Investopedia "The size of the bid-ask spread from ...
0
votes
1answer
170 views

What is Share Consolidation? [duplicate]

Subject Share Consolidation Type Consolidation Description CONSOLIDATION OF EVERY 4 ORDINARY SHARES IN PDZ HOLDINGS BHD ("PDZ" OR THE "COMPANY") ("PDZ SHARES" OR "SHARES") HELD AT 5.00 P.M. ON 4 ...
1
vote
2answers
118 views

Stock Split mean double the stock units?

Financial Year Subject Subdivision Type Stock Split Description SHARE SPLIT INVOLVING THE SUBDIVISION OF EVERY 1 ORDINARY SHARE IN PENTAMASTER CORPORATION BERHAD ("PCB") INTO 2 ORDINARY SHARES IN ...
5
votes
1answer
2k views

When can an “insider” sell shares to the market?

If all the necessary information about the company at the moment is already disclosed to the public, are insiders allowed to immediately sell as much as they want? Is there a limit?
12
votes
3answers
415 views

Solid reading/literature for investment/retirement/income taxes? [closed]

I'm striving for financial literacy and education. I've been really frustrated with most of the literature that's out there surrounding retirement, income taxes, and investment. Most of it seems ...
4
votes
1answer
318 views

Mathematical proof for justification of interpretation of negative IRR

What would the mathematical proof look like of the interpretation of negative internal rate of return shown here look like which says that "Negative IRR indicates that the sum of post-investment cash ...
11
votes
2answers
351 views

Why companies appear in several stock exchanges?

Let's say I want to buy stocks of Sinopec which is a Chinese company. I would expect to buy it from HKS and in local currency. With the Degiro broker which is Dutch, I see "Sinopec Shangai Petrochem-H ...
0
votes
1answer
175 views

Loan Prepayment

I will be applying for a car loan shortly, and trying to evaluate various lender schemes. I was not really sure when its mentioned as No Pre-Payment Penalty or Foreclosure Charges Let say I have ...
0
votes
1answer
468 views

How to read WSJ US Treasury quotes

I am trying to understand how they calculated "asked yield". If anyone can explain it, I really appreciate it. I would like to see the mathematical formula and the calculation.
3
votes
1answer
5k views

ADR vs Ordinary shares

Why should someone prefer an ADR if he can get the ordinary share from the same stock exchange? Yes, ADRs often have multiple ORD bundled but they also cost more (fees for the company who manages ...
3
votes
1answer
2k views

Compound Interest Formula With Monthly Investment Increase

I'm looking to solve this problem: If I were to start investing now, With a 4% annual return compounded monthly what is the function for my return if my monthly input is initially $2000 then for ...
5
votes
1answer
456 views

What actions 'encumber' shares?

Reading through a shareholder agreement, I encountered the following section: Encumbering shares Subject to a special resolution of the shareholders to the contrary, no shareholder shall ...
1
vote
1answer
238 views

How do I know if my mutual fund is compounded?

I have money in a S&P Index Fund (VFIAX specifically). How do I know if my index fund is compounded? Furthermore, at what intervals is it compounded? And more importantly, should it be compounded?...
1
vote
2answers
74 views

Effect on Bond asset allocation if Equity markets crash?

Let's say "Tom" allocated a large amount of capital in some fund's (it's TIAA-CREF, actually) bond assets. In our fictional scenario 2 things are going to happen in the next year: The equity markets ...
2
votes
1answer
153 views

Interest rates and bonds: What is their relation?

I read in a study text that: When interest rates are decreasing, investors will migrate their bonds from short- to longer-term ones When interest rates are increasing, investors will migrate their ...
1
vote
2answers
493 views

If I deposit money as cash does it count as direct deposit?

If I deposit money as cash does it count as direct deposit ? I am asking before I got an offer from a bank if I do one direct deposit within 90 days. Free money is good.
67
votes
9answers
18k views

Why do financial institutions charge so much to convert currency?

With all the modern technology that we have, I am astonished that financial institutions charge such exorbitant prices for currency conversions. My bank, Fifth Third, charges a 3% conversion fee, ...
1
vote
2answers
234 views

How to manage household finances (income & expenses) [duplicate]

We are a young family of two, both working and having comparatively equal income. The question is how do we budget our common expenses (relatively equally) and at the same time preserve our freedom to ...

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