Questions tagged [financial-literacy]
for questions related to understanding basic concepts in finance or certain terms in a particular context
640
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Is the Operating Income or Loss equivalent to Total Revenues 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 ...
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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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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 ...
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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 ...
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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 ...
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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 ...
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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 ...
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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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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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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 ...
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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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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 ...
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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 ...
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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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Order Book - Does the price (ask or bid) depend on the size of the order?
I still haven't quite grasped the concept of order book. In fact I still have a few questions like the one in the title.
I understand that in a market, at any given time, there is a list of pending ...
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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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Does the stock market provide better long term returns than bonds outside the US?
There is an old saying that stock market provides better long term returns than bonds. The example usually cited is always the US stock market which has had a good bull run and has it doubled in ...
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I (21M) make decent money for my age. What are the best financial moves for my situation?
Like the title says, I'm 21 and I work as Software Engineer. I bring home a little over $3,600 a month(After taxes). My monthly expenses are as follows:
Rent/Utilities $626
Phone $100
Car insurance $...
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composition of ADR in comparison to home market
I want to know how one unit of ADR is constructed from the home stock.
For example, I see a ADR for India's Tata motors . ADR is trading at about $12 and in home market it is about INR 177, but given ...
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What does it mean by Global recession? [closed]
I am bit curious to understand what it actually means when I read global recession is coming soon. There are some questions which pop in my mind reading such news. Some of them are:
What causes ...
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Is rent considered a debt?
I am taking a financial assessment. It asks me:
What is your total monthly debt payment (e.g. student loans, vehicles, credit cards, personal loans, etc.)?
Then the next questions are about ...
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How to do financial planning?
I'm not doing this for any entity other than me. I run a business and I'm doing some financial goal-setting for the next few years. What I'm trying to achieve with this is setting numeric goals with ...
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Is the math wrong on these future value and draw-down calculations?
Let's say I plan on retiring in 10 years, have some IRAs (401(k) rollovers), a conservatively invested taxable account and plan on contributing 15% to my 401(k) until I retire.
I'm using round ...
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Ways you can end up paying extra on a credit card even if you pay the full amount back in due time
If you are a financially responsible person, you know how a credit card works, you pay back the loans in full before the due date, you don't take out money form the ATM or otherwise do something that ...
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As a 16 year old, how can I keep my money safe from my mother?
I am 16 and still in HS and work 20+ hours a week. I live with my mother (my Dad left us when I was a kid and I don't see him anymore). My mother is an alcoholic and has trouble keeping a job. I don't ...
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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 ...
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Why Do People Continue Using Expensive Payment Services Like Paypal And Western Union [closed]
Paypal - the 'industry standard' for online payments makes this opportunity inaccessible to Africans in most cases. Most, who qualify to be a part of the workforce for some internet companies are not ...
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When is Retained Earnings considered equivalent to issued common stock?
The below reference states:
"As long as management is presumed to be acting in the best interests of the stockholders, retained earnings can be regarded as equivalent to a fully subscribed, pre-...
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What should I look at to decide whether to keep or not my Restricted Stock Units?
The company has been happy with my performance these years, and I received RSU which started investing. I have never owned stocks before: even though the company is US-based, I'm not a US resident and ...
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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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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 ...
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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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Is there a 1031 Exchange equivalent in Ireland?
I've recently been looking into buying real estate investments, & I've read about a 1031 Exchange in USA.
Here is a definition I've found:
Thanks to IRC Section 1031, a properly structured ...
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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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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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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 ...
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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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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 ...
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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 ...
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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.
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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 ...
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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-...
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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 ...
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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 ...
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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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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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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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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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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 ...
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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 / ...
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