How Hard Is it to Get a Freddie Mac Loan?

Response: To get a Freddie Mac loan, you will have to meet the lender's criteria. Depending on the size of the loan, you'll need a certain income as well as credit score to qualify. You can receive a pre-qualification letter that will let you know what amount of loan you can qualify for, but this pre-qualification is not a guarantee.


Response: The role of an internal audit is to identify a deficiency or substantiate a proficiency. For example, a company may issue an internal financial audit to make sure its internal controls over accounts payable adhere to company policy. Alternatively, the company may launch an internal environmental audit to explore how environmental impact its eco-friendly changes had on the planet last year.


Why Are Correlations Important in Finance?

Response: Correlations play an important role in finance because they are used to forecast future trends and to manage the risks within a portfolio. These days, the correlations between assets can be easily calculated using various software programs and online services. Correlations, along with other statistical concepts, play an important role in the creation and pricing of derivatives and other complex financial instruments.


Response: The SPV itself acts as an affiliate of a parent corporation, which sells assets off of its own balance sheet to the SPV. The SPV becomes an indirect source of financing for the original corporation by attracting independent equity investors to help purchase debt obligations. This is most useful for large credit risk items, such as subprime mortgage loans.Not all SPVs are structured the same way. In the United States, SPVs are often limited liability corporations (LLCs). Once the LLC purchases the risky assets from its parent company, it normally groups the assets into tranches and sells them to meet the specific credit risk preferences of different types of investors.


Response: Carbon credits have different prices, depending on the location and market where they are traded. In 2019, the average price for carbon credits was $4.33 per ton. This figure spiked to as much as $5.60 per ton in 2020 before settling to an average of $4.73 in the first eight months of the following year.


Can a Joint Tenancy With Right of Survivorship Sell Their Share?

Response: A joint tenant can sell their share of the asset to someone else. Doing so nullifies the agreement, turning it into a tenancy in common.


What Is Different About Today's Joint-Stock Companies?

Response: The legal liability that shareholders must shoulder is different. In the past, any shareholder could be held totally liable for debts that a company owed and couldn't pay. Shareholders' personal property could be seized by creditors or the authorities as payment. Today, a shareholder's liability is generally limited to their investment in a company.


What Does Total Enterprise Value (TEV) Tell You?

Response: TEV breaks down the value of a company. It goes further than market capitalization by also factoring in a company’s debts as well as its cash reserves. TEV can be thought of as the theoretical total price an acquirer pays to purchase a company and settle all claims against it.


Do I Need a Lawyer to Get a Letter of Testamentary?

Response: Typically, a lawyer or attorney is necessary to get a letter of testamentary during the probate process, particularly if there are multiple beneficiaries. However, laws can vary, depending on each state, and in some cases, a non-attorney may be allowed to manage the probate process for a deceased person.


What Are Examples of the Network Effect?

Response: Social media networks such as Facebook and X are great examples of the network effect. The value of these websites increases as more people sign up for accounts on the site.


What's the Difference Between Bill of Exchange and Promissory Note?

Response: The difference between a promissory note and a bill of exchange is that the latter is transferable and can bind one party to pay a third party that was not involved in its creation. Banknotes are common forms of promissory notes. A bill of exchange is issued by the creditor and orders a debtor to pay a particular amount within a given period of time. The promissory note, on the other hand, is issued by the debtor and is a promise to pay a particular amount of money in a given period.


Response: It depends on what you want in an investment. A safe haven is a lower risk (lower return) investment that can help diversify a portfolio and offset to some degree the greater risk of investments that offer the potential for higher returns. Having both types of investments makes sense for many investors.


Response: An ombudsman is someone appointed to investigate complaints against an institution and seek resolutions to those complaints. Some have full authority to investigate and resolve issues, and some have limited capacity to only investigate and provide suggested resolutions to a governing authority or the institution subject to the complaint.


Response: While network and multi-level marketing programs have been accused of being pyramid schemes, there are some important differences. While those who are able to recruit more members into the program are often able to enjoy greater residual commissions, network marketing is a legitimate and legal business structure that offers real products and services sold to customers.


How Do You Know When a Company Will Release Its Quarterly Earnings Report?

Response: You should be able to obtain the exact date and time for a quarterly earnings report announcement from the company's investor relations department. You can also track it on an earnings calendar through Nasdaq or your broker.


Response: A good ATR depends on the asset. If it generally has an ATR of close to $1.18, it is performing in a way that can be interpreted as normal. If the same asset suddenly has an ATR of more than $1.18, it might indicate that further investigation is required. Likewise, if it has a much lower ATR, you should determine why it is happening before taking action.


Response: Gap insurance might be a good choice if you didn't make much of a down payment when you financed your car or if you plan to drive it in a way that might decrease its resale value quickly, such as taking many long road trips or exploring rough roads. It also might be a good option if you took out a car loan with a term longer than five years.


Response: Cash equivalents have certain benefits over cash that make them better for some investors. However, both types of financial instruments are very similar and yield similarly low yields. The difference between cash and cash equivalents is minimal. Although, cash equivalents can often yield a bit more interest.


Response: A master limited partnership or MLP is a publicly traded limited partnership focused on the real estate or natural resources sector. Investors can buy units of an MLP on national exchanges. MLPs can offer steady income as well as a variety of tax advantages. They are not without risk, however, due to their concentrated exposure to a single industry.


Response: When people relocate to a foreign country, they often find comfort in seeking out other foreigners, especially from their home country. Expat communities are enclaves of people from a similar national origin, often with their own school and shopping options. In many countries, English-speaking enclaves are called "Anglo" communities.


Can You Get Your Money Back If You're a Victim of a Wire Fraud Scam?

Response: You can try to get your money back, but you might not be successful. Contact the company you used to wire the money (such as Western Union) and ask for a reversal of the fraudulent transaction. If you sent the money through your bank, contact them right away to let them know and ask if they can reverse it.


Response: Standard deviation describes how dispersed a set of data is. It compares each data point to the mean of all data points, and standard deviation returns a calculated value that describes whether the data points are in close proximity or whether they are spread out. In a normal distribution, standard deviation tells you how far values are from the mean.


What Are Some of the Benefits of the Long Run?

Response: Since the costs are variable in the long run, firms have the option to make adjustments to the way it operates. So when the need arises, it can increase or decrease operations. Furthermore, they can decide how best to shape their factors of production in order to reduce costs.


Response: E-commerce is any sale of goods and services that is finalized in a transaction on the Internet.E-commerce is an alternative to transactions that take place in brick-and-mortar stores. Today, many companies offer their customers the choice of online or in-store purchasing.


Response: There are very rare exceptions and exemptions to OASDI taxes, including clergy of certain religious groups and some types of nonresident aliens. Note, however, that these individuals are also ineligible to receive Social Security payments.


Response: A NASA SEWP contract is a type of government-wide acquisition contract. It procures and provides IT products and services for federal government agencies. The contract is initiated by NASA, which is known as the executive agent in the contract. Other agencies may sign on to receive services, which helps reduce the cost each agency has to spend.


Response: The Arab League is not a military alliance per se. But its founding members agreed to cooperate in military affairs and coordinate military defense. At the 2007 summit, the leaders of its member states decided to reactivate their joint defense and establish a peacekeeping force to deploy in South Lebanon, Darfur, Iraq, and other hot spots.At a 2015 summit in Egypt, member states agreed to form a joint voluntary military force in principle.


Response: Some of America's greatest brands have died. They may have failed to keep up with the times. Or the businesses that owned them may have mismanaged them.BobVila.com lists these brands, all of them once household names, that have vanished: Borders, Pan American, F. W. Woolworth, Toys R Us, Blockbuster, Tower Records, Compaq, and Oldsmobile.To be fair, Toys R Us made a comeback in 2022 as a store-within-a-store at some Macy's locations.


Why Did a Premium on Crypto Emerge in South Korea?

Response: It is difficult to move large amounts of foreign money into and out of South Korean exchanges, and banks have strict reporting requirements for moving funds in and out of the country. As a result of the crypto's popularity in the country, the prices of certain cryptocurrencies rose as high as 20% above prices elsewhere, a phenomenon that has lasted for several years.


Response: NINJA loans have largely ceased to exist in the United States due to tighter lending standards put in place after the 2008 financial crisis.


Has Michael Milken Donated to Education?

Response: Education is a key focus of the Milken Family Foundation. Among other things, the foundation awards prizes to hardworking K-12 teachers and principals and offers financial support to college-bound students in need of assistance.


How Can Options Traders Profit from a Delta-Neutral Position?

Response: Options traders can profit from delta-neutral positions by selling options and collecting the time decay as time passes. By eliminating exposure to small price fluctuations, this strategy can be sharpened. Likewise, traders may bet that the underlying asset's volatility will rise or fall in the future. A delta-neutral position allows such a trader to isolate the volatility figure from the market direction.


Response: Generally speaking, Form 8379 should be filed with the IRS Service Center for the area where you live. However, if you have already filed your tax return for the year in question, you should send Form 8379 to the same Service Center you filed your tax return, even if you now live somewhere else.


Is a Tax-Exempt Organization the Same As a 501(c)(3) Organization?

Response: A 501(c)(3) is a tax-exempt organization recognized by the IRS. However, there are other forms of organization an entity can file for and be awarded that are also tax-exempt. Therefore, while a 501(c) is tax-exempt, not all tax-exempt organizations are 501(c)(3) organizations.


What Kind of Education Do You Need to Be a Quant?

Response: Individuals pursuing a career in quantitative analysis usually have a strong educational background in quantitative fields like mathematics, statistics, computer science, finance, economics, or engineering. Advanced degrees (Master’s or Ph.D.) in quantitative disciplines are often preferred, and additional coursework or certifications in finance and programming can also be beneficial.


Response: The European Union (EU) formed regulations to promote and protect an open internet, preventing internet service providers from restricting and blocking users' access to lawful content. Certain exceptions, such as the ability to slow traffic at the request of a court order, apply.


What Activities Are Included in Cash Flow From Investing Activities?

Response: The activities included in cash flow from investing actives are capital expenditures, lending money, and the sale of investment securities. Along with this, expenditures in property, plant, and equipment fall within this category as they are a long-term investment.


How Is Real Estate Used for Money Laundering?

Response: Criminals use real estate transactions, including undervaluation or overvaluation of properties, buying and selling properties rapidly, using third parties or companies that distance the transaction from the criminal source of funds, and private sales.


What Jobs Are Available in the Logistics Industry?

Response: Careers in logistics can include truck driver, customer service representative, dispatcher, freight agent, supply chain manager, transportation analyst, procurement manager, logistician, and operations manager, among others. A degree in logistics or business administration will be helpful for many roles in logistics, including logistician, a career that is expected to grow much faster than average.


What Resources Are Available to Help Determine TCO?

Response: Any information source about the operating costs of an item will be helpful. Consumer Reports is a good source for many items, including technology and automobiles. Resources like Kelley Blue Book and Edmunds are good sources for information about auto purchases.


Who Attends the Jackson Hole Economic Symposium?

Response: Prominent members from the government, academia, economics, and the financial markets attend the Jackson Hole Symposium. This includes heads of global central banks, managers of financial institutions, and professors from respectable universities such as Harvard and Stanford.


Response: If you want to forgo the full services of a listing agent and pay only to list your home on a multiple listing service (MLS), that could cost about $100 to $500. Some real estate agencies offer a MLS listing alone for a flat fee, with additional services available a la carte. There are also online services that will simply provide an MLS listing.


What are the Risks and Limitations of Using Swaps?

Response: Swaps have counterparty risk, market risk, liquidity risk, operational risk and regulatory & legal risks. Swaps may not be readily available for all market participants and like most derivatives they are complex instruments.While swaps can offer some cost advantages, there may still be costs involved such as transaction costs, legal fees, collateral requirements, or ongoing monitoring expenses. These costs need to be considered when evaluating the overall benefits and effectiveness of using swaps.


When Does a Bank Have to Notify Me of Changes?

Response: It depends. For changes unfavorable to the consumer—for example, increases in fees for bank services—Regulation DD requires financial institutions to provide the consumer with at least 30 days’ notice. For changes that are favorable to the consumer—decreasing or eliminating fees—no notice is required on the institution's part. However, if favorable changes are temporary, the financial institution must comply with the requirements for advance notice of a change in terms.


Response: All companies naturally have a SIC code, as there are over 1,000 total SIC codes possible. Companies that file public reports are often required to use SIC codes when reporting, as the SEC uses it as a basis for assigning review responsibility for company filing requirements.


Response: The primary goal of ring-fencing is to separate one group of assets from another. This is generally done to keep core assets protected from volatility and other risks. Ring-fencing is common with banks when core retail banking segments are separated from their investment arms if they are deemed "too big to fail." This layer of protection shields the taxpayer (and the government) from bearing the financial burden of bailing out banks in the event of an economic crisis.


How Much Does a Bloomberg Terminal Cost?

Response: The Bloomberg Terminal is only available as a subscription service and can run around $2,020 per month, or $24,240 for a year if there are two or more licenses. For a single subscription the cost is $27,660 per year. There are discounts available for academic licenses by universities for purposes of education and research.


Response: There are a variety of ways to buy in bulk to resell. The primary way to do so is to get in touch with the manufacturers of the goods you are trying to sell. This information is available online. You can try websites such as Wholesale Central, SaleHoo, and Doba.


Response: The dividend yield is a financial ratio that tells you the percentage of a company’s share price that it pays out in dividends each year. For example, if a company has a $20 share price and pays a dividend of $1 per year, its dividend yield would be 5%. If a company’s dividend yield has been steadily increasing, this could be because they are increasing their dividend, because their share price is declining, or both. Depending on the circumstances, this may be seen as either a positive or a negative sign by investors.


Does a Single Member LLC Need an Operating Agreement?

Response: A handful of states require all LLC's to have an operating agreement, even if they have only one member. These include New York, Missouri, and California. In the other states, it is not required, but it is strongly encouraged, since they can protect the members from problems that the LLC may encounter.


What Factors Can Increase Inherent Risk?

Response: Factors that can increase inherent risk include subjective estimates, non-routine transactions, and the use of complex financial instruments. Generally, the more complicated a company’s business model and transactions are, the higher the inherent risk is.


Response: U.S. Bank and Bank of America are two examples of retail banks because they provide consumer banking products like checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit (CDs).


Response: Costco's website states it "now accepts most vision insurance plans" for its vision care services.


Response: You can avoid transaction fees by paying for a purchase with cash. However, if you are using a credit card, there will be a per-transaction fee charged to the merchant. If the merchant does not want to pay the fee, they may raise their prices so customers would effectively be subsidizing the fee.


How Does Risk Control Differ from Risk Management?

Response: Risk control is a subset of risk management. While risk management is the overarching process of identifying, assessing, and prioritizing risks to an organization, risk control focuses specifically on implementing strategies to mitigate or eliminate the identified risks. Risk management typically involves the development of an overall risk management plan, whereas risk control addresses the techniques and tactics employed to minimize potential losses and protect the organization.


Who Helps an Investor Trade on the Stock Market?

Response: Stockbrokers act as intermediaries between the stock exchanges and the investors by buying and selling stocks. Portfolio managers are professionals who invest portfolios, or collections of securities, for clients. Investment bankers represent companies in many different ways, such as helping private companies that want to go public via an IPO or planning for mergers and acquisitions.


Response: Quality control ensures that defective goods do not go out to the public. Companies that have quality control methods in place often have employees who pay close attention to their work.In food and drug manufacturing, quality control prevents products that make customers sick, and in manufacturing, quality control can ensure that accidents don't happen when people use a product.


Can Stock Screeners Be Used for International Market Analysis?

Response: Yes, stock screeners can be used for international market analysis. Many platforms offer the capability to filter stocks based on global exchanges.


How Do Companies Choose Their Fiscal Year End?

Response: Most companies choose their fiscal year-end based on the seasonality of their business. Some businesses are seasonal while others transact the same amount of business throughout the year. Businesses generally choose their fiscal year based on the period when they receive the most profit. For example, a business that earns most of its profit after the Christmas holiday season may choose to end its fiscal year right after.


What Is the Difference Between Quantitative Analysis and Fundamental Analysis?

Response: While both rely on the use of math and numbers, fundamental analysis takes a broader approach by examining the intrinsic value of a security. It dives into a company's financial statements, industry position, the competence of the management team, and the economic environment in which it operates. By evaluating factors like earnings, dividends, and the financial health of a company, fundamental analysts aim to ascertain the true value of a security and whether it is undervalued or overvalued in the market. This form of analysis is more holistic and requires a deep understanding of the company and the industry in which it operates.


What Does It Mean to Default on a Fixed-Income Security?

Response: Default is the failure to make required interest or principal repayments on a debt, whether that debt is a loan or a security. Individuals, businesses, and even countries can default on their debt obligations.


What Are the Disadvantages of a Trading Account?

Response: With a trading account, you run some risks you wouldn't encounter with regular brokerage cash accounts. For instance, trading on margin increases your risk of loss because of the leverage used, and you may encounter interest charges on your margin funds as well. Plus, you risk margin calls and securities liquidation as a day trader with a margin account.


What Is the Weighted Average Cost of Equity?

Response: A company's weighted average cost of equity measures the cost of equity proportionally across the types of equity. Instead of taking the simple average cost across all types of equity (i.e. common shares, preferred shares, etc.), the weighted average cost of equity proportionally considers the equity value of each type of equity. To calculate the weighted average cost of equity, multiple by the cost of any given specific equity type by the percentage of capital structure it represents.


Response: Insurtech is a combination of "insurance" and "technology". It is an emerging industry that utilizes technology and modern innovations to change how traditional insurance is performed.


Response: The data suggest that it isn't. But some people seem to believe in it, perhaps because many of the events that happened long ago (such as the 1987 Black Monday crash) were significant at the time. Because there is a psychological bias toward predicting a negative outcome for this month, there is potential for some investors to be fearful of an October downturn.


What Does a Times Interest Earned Ratio of 0.90 to 1 Mean?

Response: The times interest earned ratio shows how many times a company can pay off its debt charges with its earnings. If a company has a ratio between 0.90 and 1, it means that its earnings are not able to pay off its debt and that its earnings are less than its interest expenses.


Response: The Rule of 72 formula provides a reasonably accurate, but approximate, timeline—reflecting the fact that it's a simplification of a more complex logarithmic equation. To get the exact doubling time, you'd need to do the entire calculation.The precise formula for calculating the exact doubling time for an investment earning a compounded interest rate of r% per period is:To find out exactly how long it would take to double an investment that returns 8% annually, you would use the following equation:T = ln(2) / ln (1 + (8 / 100)) = 9.006 yearsAs you can see, this result is very close to the approximate value obtained by (72 / 8) = 9 years.


Who Introduced Participatory Notes in India?

Response: Participatory notes were introduced in India in 2000 by the Securities and Exchange Board of India (SEBI) to allow foreign investors (financial institutions and high-net-worth individuals) access to the Indian financial markets without having to register as a foreign institutional investor (FII).


Are Hurricanes Usually Part of Homeowners Insurance?

Response: You may have to get separate flood insurance and windstorm insurance to cover hurricane damage. These policies may not be part of homeowners insurance, however some policies may include windstorm insurance. Most standard homeowners insurance won't cover flood damage.


How Much Should Be Saved in an Emergency Fund?

Response: Most financial experts recommend that people contribute to an emergency savings fund to cover things like mortgage/rent payments, other bills, and basic needs in the case of a job loss, health emergency, or other crisis. While there is no consensus on exactly how much to save in an emergency fund, many advocate for at least 3-6 months' worth of living expenses.


What Are Some Common Types of Special Economic Zones?

Response: Some of the most common types of special economic zones are free-trade zones, export processing zones, industrial parks, and specialized zones. Many of these offer users tax incentives, such as exemption on duties and other fees, and access to foreign direct investment.


How Can a Trust Stop Someone From Squandering an Inheritance?

Response: A trust that can safeguard an inheritance is referred to as a spendthrift trust. It contains provisions that prevent a potentially spendthrift beneficiary from taking their entire inheritance at once and wasting all the money or assets. The trust apportions bequests in smaller increments, typically over a period of years. The beneficiary doesn't have a great deal of money to spend or waste at any particular time.These trusts can also offer some protection from creditors.


What Are Some Drawbacks of Cost Accounting?

Response: Cost-accounting systems ,and the techniques that are used with them, can have a high start-up cost to develop and implement. Training accounting staff and managers on esoteric and often complex systems takes time and effort, and mistakes may be made early on. Higher-skilled accountants and auditors are likely to charge more for their services when evaluating a cost-accounting system than a standardized one like GAAP.


What Is the Importance of Third-Party Insurance?

Response: Third-party insurance is a form of liability insurance. It offers the insured coverage for injury or damage they have caused to another person or business. Without third-party insurance, a person or business could end up paying extremely high damages to someone they have injured, whether or not the injury was intentional.


Response: Usury has a long history. It has primarily become illegal to prevent individuals from predatory loan practices; situations in which people need to borrow money but are charged a high interest rate, often resulting in difficulty paying back the loan with interest and/or financial ruin. Usury is also not permitted in many religions, which has had an impact on its legality in society.


What Type of Companies Are Attractive for LBOs?

Response: Equity firms typically target mature companies in established industries for leveraged buyouts rather than fledgling or more speculative industries. The best candidates for LBOs typically have strong, dependable operating cash flows, well-established product lines, strong management teams, and viable exit strategies so that the acquirer can realize gains.


Response: Commonly used in marketing strategies, market segments help companies optimize their products and services to suit the needs of a given segment. Market segments are often used to identify a target market.


Response: The U.S. government's fiscal year begins on Oct. 1 and ends on Sept. 30. Companies that rely on contracts from the government also may structure their fiscal years to end in late September. Conversely, many tech companies experience strong sales volumes during the first half of the year, which can explain why, in many cases, their fiscal years will end in late June.


Response: Stock symbols are called tickers because they first appeared as imprints on tickertape transmitted by telegraph from stock exchanges to investors around the country. This name persisted, even after physical tickertape was replaced by more modern technologies.


Response: One example of a GDR is the American oil and gas company, Phillips 66 (NYSE: PSX). In addition to trading domestically, it has depositary receipts listed on exchanges in Brazil (P1SX34), France (R66), Vienna (PSXC), and London (0KHZ.L), among others.


How Does the Deposit Multiplier Relate to the Money Supply?

Response: The deposit multiplier is an indicator of how much a bank's lending activity can add to the money supply. Essentially, banks multiply deposits throughout the country by lending money to borrowers who then deposit the money in their own bank accounts. The deposit multiplier represents the amount of money that can be created based on a single unit held in reserve. The higher the Fed's reserve requirement, the smaller the deposit multiplier, and the less of an increase in deposits created through lending.


Response: HNWIs are highly sought-after clients for wealth managers. They generally qualify for personalized managed investment accounts instead of regular mutual funds. They also qualify for estate planning and tax planning as well as portfolio management services.


What Is the Black Box Model vs. the White Box Model?

Response: In the field of artificial intelligence, a black box model uses a machine-learning algorithm to make predictions while the explanation for that prediction remains unknowable and untraceable.A white box model attempts to incorporate restraints that make the machine learning process more transparent.Transparency, or "interpretability," could be an ethical and legal objective in models used in healthcare, banking, or insurance, among other industries.


Response: It depends on your mining setup and the costs you've incurred to begin mining. It can take years to recoup your costs and start making a profit. However, if you're not worried about costs and profit but only about what you'll get per day, a modern high-end gaming PC can generate about $1 per day before considering electricity and other costs.


What Happens If a Company Defaults on Its Bonds?

Response: If a company goes bankrupt and defaults on its bonds, bondholders have a claim on that company's assets. But the type of bond, whether that's secured or unsecured, will determine the priority of a bondholder's claim. A company going through bankruptcy will also have other creditors. Ultimately, claims on the company's assets will be sifted through in bankruptcy court.


What Is Hong Kong Ranked in the Financial Market?

Response: According to the Global Financial Centres Index 34, published in Sept. 2023, Hong Kong ranks fourth in a list of the top global financial centers, behind New York, London, and Singapore.


What Steps Should Companies Take to Start a Wellness Program?

Response: Companies looking to start a wellness program should poll their employees on the perks they find most beneficial. While a younger company base may prefer wellness programs such as subsidized gym memberships, more established corporations may prefer health screenings or mental health benefits such as access to free therapy, counseling sessions, or otherwise.


Response: A BATNA, or Best Alternative to Negotiated Agreement, is the best option in the view of one party in a negotiation if the talks break down. A strong BATNA gives that party a reasonably attractive alternative to negotiation. If an agreement cannot be reached the BATNA can be implemented with minimal disruption.


Response: A bond is a debt security, like an IOU. When you purchase a bond, you are lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value when it matures.


Response: Market practices would indicate that a loan-to-deposit ratio (LDR) that is above 80% is risky. This signals that a bank has low liquidity and could have difficulty paying its depositors their funds.


Response: Military base pay—also known as basic pay—refers to the standard compensation amount received by U.S. military members. Military base pay represents the biggest part of a member's total compensation and excludes other forms of compensation, such as housing and food allowances. Active duty pay is based on the member's pay grade and their number of years of service.


What Is the Difference Between an Ordinary Annuity and an Annuity Due?

Response: An ordinary annuity generates payments at the end of the annuity period, while an annuity due is an annuity with the payment expected or paid at the start of the payment period.


Response: Arbitrageurs often use specialized trading software designed for algorithmic trading. This software can process real-time market data, analyze that data, and execute trades very quickly after doing so. Also, many arbitrageurs use custom-built systems tailored to their specific trading strategies. These systems often have powerful processors and high-speed internet connections to minimize trade execution time. Cloud computing and data analytics are crucial since traders often need to store, process, and analyze large datasets when looking for arbitrage prospects across global markets.


How Is a Beneficiary Taxed on IRD That's a Required Minimum Distribution?

Response: Just as the decedent would have been. For example, an RMD from a traditional IRA would have been reported by the decedent as regular income and taxed as such. The beneficiary will report the RMD in the same way and will owe tax that corresponds to their income tax bracket.


What Is the Hawk and Dove Theory in Economics?

Response: The hawk and dove theory in economics seeks to place economic policymakers into one of two buckets: doves and hawks. Doves seek an expansionary monetary policy, keeping interest rates low and pursuing a policy of quantitative easing. Hawks, on the other hand, seek a contractionary monetary policy, keeping interest rates high and avoiding quantitative easing.


How Do You Calculate Return on Investment (ROI)?

Response: Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage. Although ROI is a quick and easy way to estimate the success of an investment, it has some serious limitations. ROI fails to reflect the time value of money, for instance, and it can be difficult to meaningfully compare ROIs because some investments will take longer to generate a profit than others. For this reason, professional investors tend to use other metrics, such as net present value (NPV) or the internal rate of return (IRR).


What Is the Difference Between Horizontal Analysis and Vertical Analysis?

Response: The primary difference between vertical analysis and horizontal analysis is that vertical analysis is focused on the relationships between the numbers in a single reporting period, or one moment in time. Horizontal analysis looks at certain line items, ratios, or factors over several periods to determine the extent of changes and their trends.


Response: Time and tick is a way to determine if a margin call should be issued. With this method, only open positions are used to calculate a day trade margin call.


Response: A supply curve illustrates the relationship between prices and supply. As the price rises for a particular good or service, the more of it producers will be motivated to provide.When a demand curve and a supply curve for a particular item are overlaid on the same graph, the point at which they intersect is referred to as the equilibrium point. That's the price at which the quantity consumers are willing to buy and the quantity producers are willing to deliver are perfectly matched.


Response: The two main types of duopoly: the Cournot duopoly and Bertrand duopoly.The Cournot duopoly model states that the quantity of goods or services produced structures the competition among the two companies in an industry. According to the model, the two companies decide collaboratively to split the market between one another. If one company alters its production levels, the other company must also alter its production to maintain the equilibrium of a 50/50 split of the market.On the other hand, the Bertrand duopoly model states that it is price and not production quantity that structures the competition between the two firms. The model posits that consumers will choose the lower-priced product when given two choices of equal quality. This implies that the two companies in the duopoly will engage in a price war to gain market share.


What Are Some Defense Strategies Against Hostile Takeovers?

Response: Target firms that face hostile takeovers have different strategies available to them, including the white knight, poison pill, golden parachute, crown jewel, or a pac-man defense.


What Is the Difference Between Stocks and Securities?

Response: Stocks, or equity shares, are one type of security. Each stock share represents fractional ownership of a public corporation, which may include the right to vote for company directors or to receive a small slice of the profits. There are many other types of securities, such as bonds, derivatives, and asset-backed securities.


What's a Limitation of Incremental Analysis?

Response: One aspect that companies must be aware of is the potential for cost assumptions to be wrong. Every effort must be made to make correct cost estimates so that the choice of an opportunity that a business ultimately makes doesn't affect the company negatively.


Response: Investment grade is considered to be rated BBB- or higher for Fitch and S&P Global. Investment grade for Moody’s is considered Baa3 or higher.


Why Is the Labor Force Participation Rate Declining?

Response: The participation rate has steadily declined since the late 1990s, largely due to the retirement of baby boomers and other significant demographic changes. In 2020, there was a sharp drop in labor participation due to the COVID-19 pandemic, which shuttered many businesses and forced many people to temporarily leave the workforce.


Response: Adopting ESG principles means corporate strategy focuses on environment, social, and governance. This means taking measures to lower pollution, and CO2 output, and reduce waste. It also means having a diverse and inclusive workforce, at the entry level and the board of directors.


Response: By law you're entitled to a free copy of your credit report at least once a year from each of the three major credit bureaus. The official website for all three is AnnualCreditReport.com. Note that if you find any errors in a credit report—particularly ones that might be damaging to your credit score—you can dispute that information with the credit bureau. It is required to investigate the matter and report back to you on its findings.


What Happens at the End of a Decreasing Term Life Policy?

Response: At the end of a decreasing term life policy, it terminates along with the death benefit coverage.


Response: A convertible bond is a debt instrument that has an embedded option that allows investors to convert the bonds into shares of the company's common stock. Convertible bond valuations take a multitude of factors into account, including the variance in underlying stock price, the conversion ratio, and interest rates that could affect the stocks that such bonds might eventually become. At its most basic, the convertible is priced as the sum of the straight bond and the value of the embedded option to convert.


What Are Some Examples of Unearned Income?

Response: Unearned income includes interest from savings, certificates of deposit (CDs), or other bank accounts, bond interest, alimony, capital gains, and dividends from stock. Income from retirement accounts, Social Security benefits, inheritances, gifts, welfare payments, rental income, and annuities are all also classified as unearned income.


Response: Nobody turns down a bonus, and that's what deferred compensation is.A rare exception might occur if an employee feels that the salary offer for a job is inadequate and merely looks sweeter when the deferred compensation is added in. In particular, a younger employee might be unimpressed with a bonus that won't be paid until decades down the road.In any case, the downside is that deferred compensation cannot be accessed for years, normally until the employee retires.For most employees, saving for retirement via a company's 401(k) is most appropriate. However, high-income employees may want to defer a greater amount of their income for retirement than the limits imposed by a 401(k) or IRA.


Response: If you write a check for an amount that you had insufficient funds to cover, your bank will most likely charge you a non-sufficient funds (NSF) fee as well as potentially an overdraft fee. The business to which you wrote the bounced check may also levy a charge against you for the lack of payment. Other consequences of a bounced check include businesses refusing to accept your checks, a reduction of your credit score, and possibly even legal trouble.


How Do I Reconcile Outstanding Checks with My Bank Statement?

Response: To reconcile outstanding checks with your bank statement, compare the checks issued but not yet cleared with the information provided on the statement, ensuring that both records align. On your reconciliation sheet, outstanding checks are often subtracted from your balance per bank because these withdrawals have not yet happened but are simply a timing matter.


Response: Redlining is a discriminatory practice because it puts services—usually financial services—out of reach for residents of certain areas based on race or ethnicity. Evidence of redlining can be observed in the systematic denial of mortgages, insurance, loans, and other financial services based on location rather than on the individual’s qualifications and creditworthiness. Black inner-city neighborhoods were most likely to be redlined.


Response: A product or service exhibits a positive network effect when the value of the product or service increases as the number of users increases.


What Are the Three Fiduciary Duties Owed to Shareholders?

Response: Since corporate directors can be considered fiduciaries for shareholders, they possess the following three fiduciary duties:Duty of care requires directors to make decisions in good faith for shareholders in a reasonably prudent manner.Duty of loyalty requires that directors should not put other interests, causes, or entities above the interest of the company and its shareholders.Finally, duty to act in good faith requires that directors choose the best option to serve the company and its stakeholders.


Response: For a given period, net exports = total exports - total imports


Response: Noting Livermore's experiences chronicled in the book, Reminiscences of a Stock Operator by Edwin Lefevre, William J. O'Neil, the founder of "Investor's Business Daily," wrote, "in my 45 years of experience in this business, I have only found 10 or 12 books that were of any real value and Reminiscences is one of them." Today, many in the market know Jesse Livermore from the pseudonymous Twitter account of the same name where the strategies of Jesse Livermore are discussed and advised.


Response: An underbanked customer is someone who has a bank account but often relies on alternative sources, such as money orders, check-cashing services, and payday loans, to manage finances.


What Is Long Straddle Using Implied Volatility?

Response: Many traders suggest using the long straddle to capture the anticipated rise in implied volatility by initiating this strategy in the period leading up to the event but closing it before the occurrence of the event. This method attempts to profit from the increasing demand for the options themselves.


Response: Grace periods are sometimes referred to as "forgiveness periods," although this is a misnomer. Debt obligations are not forgiven during grace periods, they are simply postponed for a short period of time.Grace periods should not be confused for deferments or moratoriums, which are time periods in which a lender allows the borrower to miss payments due to hardships or other reasons.


Response: This distribution pattern is used in statistics but has implications in finance and other fields. Banks may use it to estimate the likelihood of a particular borrower defaulting, how much money to lend, and the amount to keep in reserve. It’s also used in the insurance industry to determine policy pricing and assess risk.


What Is the Difference Between the European Union (EU) and the Eurozone?

Response: The European Union (EU) is a political and economic grouping of 27 countries committed to shared democratic values. Eight of these countries do not use the euro, leaving 19 nations in the so-called eurozone, who share the common currency.


Response: Retail sales are seen as a stand-in for consumer spending, and by extension, can be seen as a key measure of the health of the economy.


What Is Excluded From the Operating Profit?

Response: Revenue created through the sale of assets is not included in the operating profit figure, except for any items created for the explicit purpose of being sold as part of the core business. In addition, interest earned from cash such as checking or money market accounts is not included, nor does it account for any debt obligations that must be met. Finally, it does not include investment income generated through a partial stake in another company.


Response: Ad valorem taxes are levied for different purposes. With property taxes, the income is generally used to fund local government projects such as schools and parks.


How Do You Find Penny Stocks on Robinhood?

Response: You can find penny stocks on Robinhood using the search function, and setting a filter for only those companies trading for less than $5 per share. Note that since Robinhood does not charge commissions, penny stock trades can be potentially more profitable than a commission-based broker.


What Is the Difference Between a Prime Loan and a Subprime Loan?

Response: Because subprime borrowers are riskier, they carry higher interest rates than prime loans. The specific amount of interest charged on a subprime loan is not set in stone. Different lenders may not evaluate a borrower’s risk in the same manner. This means a subprime loan borrower has an opportunity to save some money by shopping around. Still, by definition, all subprime loan rates are higher than the prime rate.


Why Is the Normal Distribution Called "Normal?"

Response: The normal distribution is technically known as the Gaussian distribution, however, it took on the terminology "normal" following scientific publications in the 19th century showing that many natural phenomena appeared to "deviate normally" from the mean. This idea of "normal variability" was made popular as the "normal curve" by the naturalist Sir Francis Galton in his 1889 work, Natural Inheritance.


How Does Taxation Differ for Non-Resident and Resident Aliens?

Response: The main difference lies in how non-resident and resident aliens are taxed. For example, a resident alien can use foreign tax credits, whereas a non-resident cannot. However, in general, a resident alien is subject to the same taxes as a U.S. citizen, while a non-resident alien only pays tax on domestic income that is generated within the U.S., not including capital gains. Resident aliens are required to report worldwide income from sources both within and outside the United States. Income is reported using Form 1040. Non-resident aliens, on the other hand, report domestic income using Form 1040NR or Form 1040NR-EZ.


Response: Karl Marx is best known for his theories that led to the development of Marxism. His ideas also served as the basis for communism. His books, Das Kapital and The Communist Manifesto, formed the basis of Marxism.


What Is the Difference Between the Rule of 70 and the Rules of 69 or 72?

Response: The Rule of 72 or the Rule of 69 may also be used. The function is the same as the rule of 70 but uses 72 or 69, respectively, in place of 70 in the calculations. The Rule of 69 is often considered more accurate when addressing continuous compounding processes, and 72 may be more accurate for less frequent compounding intervals.


What Is the Difference Between Red, Green, Black, and White Candlesticks?

Response: A read candlestick is one where the price closes lower than the opening. Green, black, and white candlesticks are all the same thing, where the price closes higher than the open. The difference in colors is due to different programs, but the candlesticks mean the same thing.


What Are Examples of Liabilities That Individuals or Households Have?

Response: Like businesses, an individual's or household's net worth is taken by balancing assets against liabilities. For most households, liabilities will include taxes due, bills that must be paid, rent or mortgage payments, loan interest and principal due, and so on. If you are pre-paid for performing work or a service, the work owed may also be construed as a liability.


Response: Calculating the DCF involves three basic steps. One, forecast the expected cash flows from the investment. Two, select a discount rate, typically based on the cost of financing the investment or the opportunity cost presented by alternative investments. Three, discount the forecasted cash flows back to the present day, using a financial calculator, a spreadsheet, or a manual calculation.


Response: You can find listings via online real estate marketplaces, on social media, and by simply calling local realtors and asking them about upcoming open houses in your area.


What Is the Current Unemployment Rate in the United States?

Response: The unemployment rate in the United States is 3.8% as of March 2024.


Response: Normally, credit unions offer higher rates on interest-bearing accounts, lower rates on loans, lower fees, and a more personal touch when it comes to customer service.


What Is the Difference Between Mode and Mean?

Response: The mode is the number in a set of numbers that appears the most often. The mean of a set of numbers is the sum of all the numbers divided by the number of values in the set. The mean is also known as the average.


What Is a Balanced Scorecard and How Does It Work?

Response: A balanced scorecard is a strategic management performance metric that helps companies identify and improve their internal operations to help their external outcomes. It measures past performance data and provides organizations with feedback on how to make better decisions in the future.


Why Do Firms Engage in Proprietary Trading?

Response: Financial institutions engage in proprietary trading as a way of benefitting from perceived competitive advantages and maximizing their profits. Since proprietary trading uses the firm's own money rather than funds belonging to its clients, prop traders can take on greater levels of risk without having to answer to clients.


Are Electric Vehicles Considered a Part of Infrastructure?

Response: The Investment and Jobs Act (IIJA) provides funding to develop the country’s EV-charging infrastructure and install 500,000 publicly accessible charging stations compatible with all vehicles and technologies by 2030.


What Are the Back-End Ratio Requirements?

Response: Typically, lenders want to see a back-end ratio of at least 36%, although some lenders may allow for a higher back-end ratio. For example, some lenders may allow for a maximum back-end ratio of 43%.


What is on the horizon for leveraged buyback regulation?

Response: In the Inflation Reduction Act of 2022 there is a 1% excise tax on buybacks exceeding $1 million as of Jan. 1, 2023. President Biden also announced in his Feb. 2023 State of the Union address that he would propose quadrupling the tax on corporate stock repurchases, although this is yet to be officially announced and it is unclear whether it would apply to leveraged buybacks specifically.


What Degree Do You Need to Be an Investment Banker?

Response: Educational requirements for investment bankers usually include an MBA from a top-notch institution, and some may have an advanced degree in mathematics. They may also need the chartered financial analyst (CFA) designation, which is offered by the CFA institute.


Response: Demand for a good or service affects demand for a related good or service and the raw materials, labor, technology, and processed materials used to produce the related product or service. In addition, with an increased demand for raw materials, international trade may be created or boosted, and indirectly, as production increases, demand for energy increases. Companies can anticipate and plan for demand shifts when demand for a related or complimentary product or service changes.


Response: Pensions can pay out in a few different ways, primarily depending on what is agreed upon with your employer or what is stipulated in the legal docs. Most commonly, a pension pays out a fixed monthly sum. It is also possible to receive the entire pension as a lump sum.


How Much Did James Clark Make From Netscape?

Response: James Clark received a $1.2 billion settlement for the sale of Netscape to AOL in 1998.


What Does the HGB Regulate in the Context of Commercial Activities?

Response: The HGB regulates aspects like business formation, management, accounting, financial reporting, contracts, and liability in commercial activities, creating a legal framework for businesses to operate within.


Response: The kiddie tax was created under the Tax Reform Act of 1986 to stop parents from registering income-producing investments in their children’s name to pay fewer taxes. Income received from investments is generally taxed at ordinary income tax rates, which is based on how much an individual earns.


What Is the Relationship Between Present Value and Future Value?

Response: Present value and future value simply indicate the value of an investment looking forward or looking back. The two concepts are directly related, as the future value of a series of cash flows also has a present value. For example, a present value of $1,000 today may be equal to the future value of $1,200 today.Most often, investors and analysts will know one value and try to solve for the other. For instance, if you buy a stock today for $100 that awards a 2% dividend each year, you can calculate the future value. Alternatively, if you want to have $10,000 of future value on hand for a down payment for a car next year, you can solve for the present value.


Response: Different agreements and different lenders have different requirements for a guarantor. At the minimum, a guarantor will need to have a high credit score without any issues in their credit report. They will also have to have an income that is a certain multiple of the monthly or annual payments.


Response: Deflation is when prices drop in an economy, and is the opposite of inflation.Value deflation is actually a response to inflation, whereby higher costs induce producers to cut back on their offerings to customers in some way.


Response: There is no single number that defines an ideal payout ratio because the adequacy largely depends on the sector in which a given company operates. Companies in defensive industries tend to boast stable earnings and cash flows that are able to support high payouts over the long haul while companies in cyclical industries typically make less reliable payouts, because their profits are vulnerable to macroeconomic fluctuations.


Is a Stalking Horse Bid Legally Binding?

Response: Yes. As a stalking horse bid must be approved by a bankruptcy court, it is legally binding.


What Effect Did the Emergency Banking Act Have on the Fed?

Response: It changed the dynamic of control over monetary policy because the act granted the president greater power to respond, independent of the Federal Reserve, during a financial crisis.


Does Homeowner Association (HOA) Authority Supersede My Rights as Property Owner?

Response: This depends on the state where you live and the covenants, convictions, and restrictions (CC&Rs) that you signed and agreed to when you purchased the property. The homeowner association (HOA) may have the right to impose certain penalties on you if you do not follow their rules, which can effectively restrict your rights as a property owner.


Response: T+1, T+2. T+3 are abbreviations commonly used to denote settlement dates for certain financial transactions. The T indicates the transaction date, while the numbers refer to how many days it takes after the transaction to settle. So a T+1 transaction settles one business day after the transaction date while a T+2 and T+3 settle two and three business days later, respectively. If a transaction takes place on a Wednesday, the T+1 settlement date occurs on Thursday. A T+2 transaction initiated on a Friday settles on Tuesday since Saturday and Sunday aren't business days.


Response: Statisticians use confidence intervals to measure uncertainty in a sample variable. For example, a researcher selects different samples randomly from the same population and computes a confidence interval for each sample to see how it may represent the true value of the population variable. The resulting datasets are all different where some intervals include the true population parameter and others do not.


Response: In order to set up a trust fund, you'll need to figure out which one is best suited for you, so make sure you figure out the exact purpose of the fund. Then, decide how you'll fund it. Figure out who you want to appoint as your trustee. This person may be able to help you draft up all the documents and go through the legal process. The final step is to fund the trust fund.As with any other financial venture, make sure a trust fund is the best choice for you, your beneficiary, and your financial situation. Also, the country you live in will regulate how to set up a trust and the types of trust allowed.


What Was the Impact of the Halloween Massacre?

Response: The announcement caused the value of Canadian income trusts to immediately decline by 12%. The Canadian energy sector was impacted the most and lost approximately 17.85% in value during the 10 days that followed.


Is Lockbox Banking Suitable for Small Businesses?

Response: Lockbox banking can be beneficial for businesses of all sizes, including small businesses. It helps small businesses improve their cash flow by accelerating the collection and processing of payments, allowing them to focus on core operations rather than manual payment handling.


Response: A sinking fund is not a current asset. It is listed as an asset on a balance sheet but it is not used as a source of working capital so cannot be considered a current asset. A current asset is any asset that can be converted to cash within a year.


What Are an Employer's Obligations Under the FCRA?

Response: An employer or potential employer may request an individual's credit report for internal purposes only. The individual must have consented to such a request, and the employer must specify that it is being pulled only for employment purposes.


What Is the Punishment for Embezzlement?

Response: A person can be held civilly and criminally responsible for embezzling. Punishments range from monetary fines and restitution to imprisonment.


Response: A moral hazard is when someone with an insurance policy is incentivized to cause loss or damage in order to collect on the insurance. For instance, somebody who is terminally ill may seek a life insurance policy knowing it will payout when they pass away soon after acquiring it. Having insurable interest helps minimize moral hazard.


Response: You can open a savings account by visiting a bank branch with your government-issued ID and any cash or checks you wish to deposit. You will also be asked for your address, contact information, and a Social Security number or taxpayer identification number (TIN). You may have to open a checking account as well as a savings account, and there may be a minimum deposit threshold. It is also possible to open a savings account with an online bank.


Response: A correspondent bank is a third-party financial institution that acts as a go-between for domestic and foreign banks that need to conduct cross-border payments with each other.


Response: Investors can use ROA to find stock opportunities because the ROA shows how efficient a company is at using its assets to generate profits.A ROA that rises over time indicates the company is doing well at increasing its profits with each investment dollar it spends. A falling ROA indicates the company might have over-invested in assets that have failed to produce revenue growth, a sign the company may be in some trouble. ROA can also be used to make apples-to-apples comparisons across companies in the same sector or industry.


Response: The Great Gatsby Curve illustrates the relationship between income inequality in a country and the potential for its citizens to achieve upward mobility. Graphs that depict these two variables suggest a strong positive correlation between inequality and a lack of upward advancement from one generation to the next.


How Are the Black-Scholes Model, the Kelly Criterion, and the Kalman Filter Related?

Response: The Black-Scholes Model, Kelly Criterion, and the Kalman Filter are all mathematical systems that can be used to estimate investment returns when some key variables depend on unknown probabilities. The Black-Scholes model is used to calculate the theoretical value of options contracts, based upon their time to maturity and other factors.The Kelly Criterion is used to determine the optimal size of an investment, based on the probability and expected size of a win or loss.The Kalman Filter is used to estimate the value of unknown variables in a dynamic state, where statistical noise and uncertainties make precise measurements impossible.


Response: A nonlinear relationship is anything that can't be represented by an equation in the form f(x) = ax+b. An example of an equation for a nonlinear relationship is f(x) = x2.


How Does Artificial Intelligence (AI) Influence Quantitative Analysis?

Response: Quantitative analysis often intersects with machine learning (ML) and other forms of artificial intelligence (AI). ML and AI can be employed to develop predictive models and algorithms based on the quantitative data. These technologies can automate the analysis process, handle large datasets, and uncover complex patterns or trends that might be difficult to detect through traditional quantitative methods.


What Are Some High and Low Profit Margin Industries?

Response: High operating margin sectors typically include those in the services industry, as there are fewer assets involved in the production than an assembly line. Similarly, software or gaming companies may invest initially while developing a particular software/game and cash in big later by simply selling millions of copies with very little expense. Meanwhile, luxury goods and high-end accessories often operate on high-profit potential and low sales.Operations-intensive businesses such as transportation, which may have to deal with fluctuating fuel prices, drivers’ perks and retention, and vehicle maintenance, usually have lower operating margins. Agriculture-based ventures, too, usually have lower margins owing to weather uncertainty, high inventory, operational overheads, need for farming and storage space, and resource-intensive activities.Automobiles also have low margins, as profits and sales are limited by intense competition, uncertain consumer demand, and high operational expenses involved in developing dealership networks and logistics.


What Is the Difference Between Performance Management and Performance Appraisal?

Response: In performance management, supervisors provide ongoing feedback to employees. Performance appraisals, on the other hand, tend to provide feedback looking back over a certain period, often a year. Companies that practice performance management can include an annual performance review as part of their process, so the two aren't mutually exclusive.


What Are Interest Rates on Federal Student Loans?

Response: Direct subsidized loans and direct unsubsidized loans for undergraduates disbursed after July 1, 2023 and before July 1, 2024 have an interest rate of 5.50%. Unsubsidized student loans for graduate students have a 7.05% interest rate. Direct PLUS loans for parents and graduate students have an interest rate of 8.05%, the highest interest rate of all the federal student loans.


Response: You can find the specific instructions to file 1095-C for the 2021 tax year on the IRS website. Note, though, that the information required will be filled in by your employer.


Is a certificate of incumbency the same as a corporate resolution?

Response: A corporate resolution, according to Cornell Law School’s Legal Information Institute, is “a written legal document, issued by the board of directors of a corporation, documenting a binding decision made on behalf of the corporation.” Thus, an incumbency certificate is an example of a corporate resolution, but not all corporate resolutions are incumbency certificates.


Response: If a company doesn’t provide this metric (there’s no legal requirement to do so), you find it by looking at the firm’s financial statements. Look for the earnings, tax, and interest figures on the income statement; the amortization is usually found in the notes to operating profit or on the cash flow statement. A shortcut to calculating EBITA is to start with operating profit, also called earnings before interest and taxes (EBIT), then add back amortization.


Response: The primary advantage of a monopsony goes towards the single buyer in the market, allowing for a controlling advantage that decreases the price levels of the good or service being bought. This reduction in price allows for a reduction in costs that can be passed on elsewhere.


Response: Personally identifiable information is defined by the U.S. government as:“Information which can be used to distinguish or trace an individual’s identity, such as their name, social security number, biometric records, etc. alone, or when combined with other personal or identifying information which is linked or linkable to a specific individual, such as date and place of birth, mother’s maiden name, etc.”


Response: Regulation B applies to all persons who, in the ordinary course of business, regularly participate in the credit decision of an applicant or borrower, including setting the terms of the credit.


What Are the 3 Main Parts of Industry Analysis?

Response: Performing overall industry analysis requires looking at three things: the overall appeal (or attractiveness) of an industry, both to customers and investors; the factors that determine an individual company's success or failure within an industry; and the wider economic, political, and social forces that influence an industry.


Response: An under-collateralized loan is when a loan's collateral is less than its value. Many loans are under collateralized when the lender requires collateral, but that is a risk to the lender. If the borrower defaults on an under-collateralized loan, the lender may not be able to recoup the full amount owed.


How Do You Calculate Your Withholding Tax?

Response: You can use the Withholding Tax Estimator on the IRS website to determine your withholding tax liability. This tool can help you determine whether you'll get a refund or have to pay taxes, and by how much.


What are the costs associated with passive investment?

Response: Passive investing is often less expensive than active investing because fund managers are not picking stocks or bonds. Passive funds allow a particular index to guide which securities are traded, which means there is not the added expense of research analysts.Even passively managed funds will charge fees. Whenever deciding what kind of fund to invest in, investigate the associated costs.


Is Chi-Square Analysis Used When the Independent Variable Is Nominal or Ordinal?

Response: A nominal variable is a categorical variable that differs by quality, but whose numerical order could be irrelevant. For instance, asking somebody their favorite color would produce a nominal variable. Asking somebody's age, on the other hand, would produce an ordinal set of data. Chi-square can be best applied to nominal data.


Why Is Visibility Important in Business?

Response: Visibility ensures that businesses have the greatest understanding of their financial situation. It allows the business to assess both its short-term and long-term financial status in a much more accurate way, thus resulting in more accurate projections and financial models.


What Does Mutually Exclusive Mean in Finance?

Response: Typically, this involves budgeting and payments. If a company has $180 million to spend, it cannot spend that $180 million both by reinvesting in the business and offering bonuses to upper management. In this case, those two options are mutually exclusive. If the company can only retain licensing in a single country, that means they should not attempt to be licensed in two separate countries as they are mutually exclusive.


What Are the Reasons for Value Deflation?

Response: The primary reason for value deflation is the increase in production costs, but without wanting to pass these costs directly on to consumers in the form of higher prices. So, they can keep the price the same but reduce the size of the product, as in the case of shrinkflation.


Response: Julian Robertson was a billionaire who made his money in hedge funds and was nicknamed the "wizard of Wall Street" due to his investment acumen.


Response: If a client sues your business for errors or mistakes you made or faulty advice you gave, your general liability policy won’t cover the claim. Errors and omissions claims can be very expensive, especially for a small company.  If you don’t have E&O insurance, you’ll have to pay for any damages, settlements, and legal fees out of pocket. One large claim could put your company out of business.


What Is an Example of a Business-to-Consumer Company?

Response: One example of a major B2C company today is Shopify, which has developed a platform for small retailers to sell their products and reach a broader audience online. Before the advent of the internet, however, business-to-consumer was a term that was used to describe take-out restaurants, or companies in a mall, for instance. In 1979, Michael Aldrich further utilized this term to attract consumers through television.


How Much Down Payment Is Required for a Chattel Loan?

Response: That can depend on the loan, the lender, and your credit score. With the FHA’s Title I loans, for example, borrowers with a credit score above 500 are required to make at least a 5% down payment, while those with lower scores must put down at least 10%.


Can Employer Cut Your Retiree Health Benefits?

Response: If your employer provided you with health benefits in your retirement years, be aware that they could potentially cut those benefits under some circumstances. Private sector employers are not required to provide health benefits in retirement years, and if they do they may legally cut back on those benefits unless they promised in writing not to do so.


What Is an Example of a Public-Private Partnership?

Response: Public-private partnerships can be found in infrastructure projects such as in building toll roads and highways. One example is Canada's 407 Express Toll Route (407 ETR). This 67-mile stretch of highway was a PPP between the provincial government of Ontario and a private consortium that was responsible for the design, construction, financing, and maintenance of the highway with a lease term of 99 years, during which time they are permitted to collect tolls from users of the roadway. However, traffic levels and toll revenues were not guaranteed by the government).


How Do I Get a Purchase Money Security Interest (PMSI)?

Response: A PMSI is obtained when a creditor lends money to a borrower and the borrower uses that money to buy goods. In return, the borrower grants the creditor a security interest in those goods should they default on their loan. Different types of collateral or goods have different rules, but the broadest requirements state the secured party must file a UCC-1 to publicly communicate their intention to gain a secured interest in a good. The secured party also may be required to notify other potential secured parties.


What's the Difference Between an IRA and an Annuity?

Response: Both an IRA and an annuity can be classified as a qualified account by the IRS, granting certain tax benefits. An individual retirement account (IRA) accumulates value over time and is then drawn down in retirement. An annuity instead converts a lump sum or series of payments into a guaranteed income stream in retirement, often until the death of the annuitant.


What Assumptions Does the Poisson Distribution Make?

Response: In order for the Poisson distribution to be accurate, all events are independent of each other, the rate of events through time is constant, and events cannot occur simultaneously. Moreover, the mean and the variance will be equal to one another.


What Does Merchant Services Mean on a Bank Statement?

Response: Merchant services providers are financial intermediaries between a bank and its business clients. They may help businesses handle payment processing, cash advances, online transactions, check writing and cashing, or other necessary services to maintain cash flow.


Which Philanthropist Has Donated the Most Money?

Response: According to an annual report in Forbes magazine, Warren Buffet has donated the most money, $46.1 billion, over his 91 years, as of January 2022.


Why Is a Business Sometimes Called a Firm?

Response: The word 'firm' has Latin roots to the word "signature", indicating the word may have historically been used to describe the name of a company. In addition, the etymology of the word translates back to "a business" or "a name of a business".


How Can Warrants Dilute Earnings Per Share (EPS)?

Response: Earnings per share (EPS) is a key metric followed by investors and analysts. It is computed as a company's net income for a certain period divided by the number of shares outstanding. Warrants, however, can have a dilutive effect in that these contracts represent potential new shares that are not yet available. Therefore, fully-diluted EPS is often preferred, which takes into account all potential new shares that could be brought about through warrants, other employee stock compensation, and convertible securities.


Response: U.K. government bonds, known as "gilts" are termed as such because the original bond certificates had gilded edges, hence the name of "gilt-edged" security.


Response: The cost of a home inspection can vary by location and by the size and age of the home, among other factors. The real estate website Redfin says that inspections generally cost between $200 and $500, with the average being $336.


What Are the Types of Mortgage-Backed Securities (MBS)?

Response: There are two common types of MBSs: pass-throughs and collateralized mortgage obligations (CMO). Pass-throughs are structured as trusts in which mortgage payments are collected and passed through to investors. They typically have stated maturities of five, 15, or 30 years. CMOs consist of multiple pools of securities which are known as slices, or tranches. The tranches are given credit ratings which determine the rates that are returned to investors.


Response: Severance pay is taxed at the same tax bracket as when you were fully employed and earning the same salary. This is the case if the severance payment is equal to what your salary was. If it is less, then you will be taxed at the appropriate tax bracket.


Is a Single-Member LLC Automatically a Disregarded Entity?

Response: Yes, a single-member LLC is automatically a disregarded entity. It can request to be taxed differently.


Response: NCDs are typically issued by banks and credit unions. They are also traded on the secondary market, which can be accessed through financial brokers.


Response: The primary reason why brokers give up trades to other brokers is because when a client wants to make a trade, their regular broker is not available, and so another broker must take its place. With the advent of electronic trading and automated trading, the necessity for give-up trades has diminished as clients can make their own trades


Response: A limited liability company, commonly referred to as an LLC, is a type of business structure commonly used in the U.S. LLCs can be seen as a hybrid structure that combines features of both a corporation and a partnership. Like a corporation, LLCs provide their owners with limited liability in the event the business fails. But like a partnership, LLCs pass their profits to members so that they are taxed as part of each member’s personal income.


Response: An Enrolled Agent is authorized by the U.S. federal government to represent taxpayers before the IRS. They may also serve as tax advisors, planners, and preparers.


Why Does the Money Supply Expand or Contract?

Response: Consider a Main Street bank as a microcosm of the economy as a whole. Local people are prospering lately, so they have more money to save. They deposit it in the bank. The bank keeps part of the deposits in a vault but lends most of it out to other individuals and businesses. The loans are repaid with interest, and the bank has more money to loan. Times are good, and the money supply is increasing.But what happens when times are not so good? Bank deposits fall because people are just getting by or, worse, losing their jobs. The bank has less money to lend. In any case, businesses and individuals shy away from big spending due to the poor economy. The money supply decreases.


How Do You Buy Penny Stocks on Fidelity?

Response: You can buy penny stocks on Fidelity by searching for companies that trade for less than $5 per share. Note that those trading penny stocks must first submit a form acknowledging that they understand the risks of penny stock trading.


Response: Say's Law of Markets is a classical economic theory that states that individuals need to produce and generate income in order to purchase goods and services. According to Say, demand occurs before any production takes place—not because of the income generated. This law addresses how individuals create wealth along with how economic activity works.


How Are Cash Flows Different Than Revenues?

Response: Revenue is the income earned from selling goods and services. If an item is sold on credit or via a subscription payment plan, money may not yet be received from those sales and are booked as accounts receivable. These do not represent actual cash flows into the company at the time. Cash flows also track outflows and inflows and categorize them by the source or use.


Response: Monetary policy is controlled by a central bank, in the United States, this is the Federal Reserve. A central bank controls open market operations, reserve requirements, and the discount window/rate. A country's government is responsible for fiscal policy, such as setting taxes.


Response: The U.S. has a PDI of 40, according to the Power-Distance Index. This relatively low score is seen as reflecting a focus on equal rights. In American business, it concludes, managers rely on individuals and teams and management is accessible to employees. Communication is "informal, direct, and participative."


Response: A reverse Morris trust is a strategic way to divest a division tax-free, provided that all legal requirements are met. To undergo a reverse Morris trust, a company will create a new company for this division, then merge it with another company. Importantly, shareholders of the parent company must own over 50% of the newly created company.


Response: IRS Publication 946 is a publication by the IRS that details how to depreciate property. In particular, it explains how to recover the cost of property (such as business equipment or income-producing assets) via deprecation.


What Other Factors Go Into Choosing a Bank?

Response: Bank size is another consideration. Large retail banks are often well-known, big-name banks and have locations throughout the U.S., which is convenient if you travel often for work or vacation. You would have easier access to your funds when you're away and may be able to avoid foreign ATM fees.Otherwise, you might find that a smaller bank would offer more personalized customer service and the products you prefer. A community bank, for example, takes deposits and lends locally, which could offer a more personalized banking relationship.Choose a convenient location if you are choosing a bank with a brick-and-mortar location. If you have a financial emergency, you don't want to have to travel a long distance to get cash.See if the bank you are choosing offers other services such as credit cards, loans, and safe deposit boxes. Some banks also offer smartphone apps, which can be useful.Check the fees associated with the accounts you want to open. Banks charge interest on loans as well as monthly maintenance fees, overdraft fees, and wire transfer fees. Some large banks are moving to end overdraft fees in 2022, so that could be an important consideration.


What Is More Important: Equity or Efficiency?

Response: Both are important, though they cannot always be achieved simultaneously. Most economies generally strive to get the maximum benefits from the resources at their disposal, which seems like a no-brainer. The issue is making sure those benefits are distributed fairly among all people in society.It’s tricky to keep everyone happy, and opinions vary about which of the two, equity or efficiency, should take precedence—assuming, of course, that they cannot co-exist harmoniously.


Response: Deficits are problems because they mean you are spending more than you're earning. This applies to individuals, corporations, and governments. Deficits can result in more borrowing, more interest payments, and lower reinvestment, which can be difficult to remedy and lead to lower savings and revenue.


Is a Liquidity Trap the Same as a Recession?

Response: A liquidity trap can be a contributing cause of a recession. People save their money instead of spending or investing it. Low interest rates fail to entice them to spend more. The usual monetary policymakers' tactic of lowering interest rates can't solve the problem; rates are already at or near zero. This can spiral into a recession as demand for goods and services decline and producers cut production and jobs.


What Must Be Disclosed Under Regulation Z?

Response: Federal Regulation Z requires mortgage issuers, credit card companies, and other lenders to provide consumers with written disclosure of important credit terms. The type of information that must be disclosed includes details about interest rates and how financing charges are calculated. Lenders are also prohibited from engaging in unfair practices, and they must respond promptly to customer complaints involving billing error disputes.


Response: The FHLB is not one single bank, but it is a network of 11 regional banks that provide cash to other banks that use it.


What's the Difference Between the Effective and Marginal Tax Rate?

Response: An effective tax rate is the average tax rate for an individual or corporate taxpayer. As such, it's the percentage of taxes owed from the taxpayer's annual income. A marginal tax rate, on the other hand, is the total amount of tax levied on different levels of income. This means that a taxpayer's tax rate gets higher as their income rises. Taxpayers are divided into tax brackets under marginal tax systems where the first level of income is charged a lower rate. Any income earned above that incurs a higher rate.


What's the Difference Between Foreclosure and Pre-foreclosure?

Response: A pre-foreclosure on the house occurs when a notice of default is served after getting court approval. During this phase, a homeowner may be able to negotiate with the lender to preserve the home, usually by paying off their debts. A foreclosure occurs if the lender receives the authority to serve the delinquent borrower a foreclosure eviction notice and then proceeds to hold a public auction to sell the property.


Response: A British economist named John Hicks developed the IS-LM model in 1936, basing it on theories published by another British economist, John Maynard Keynes, only a few months earlier.


How Does Liquidity Risk Relate to Market Risk and Credit Risk?

Response: Liquidity risk, market risk, and credit risk are distinct types of financial risks, but they are interrelated. Market risk pertains to the fluctuations in asset prices due to changes in market conditions. Credit risk involves the potential loss from a borrower's failure to repay a loan or meet contractual obligations. Liquidity risk might exacerbate market risk and credit risk. For instance, a company facing liquidity issues might sell assets in a declining market, incurring losses (market risk), or might default on its obligations (credit risk).


Response: For the most part, yes. Commercial banks are heavily regulated, and most deposit accounts are covered up to $250,000 by the Federal Deposit Insurance Corporation. Moreover, commercial and investment banking funds cannot be co-mingled by law.


What Is the Difference Between ROS and Operating Margin?

Response: Return on sales and operating profit margin are often used to describe a similar financial ratio. The main difference between each usage lies in the way their respective formulas are derived. The standard way of writing the formula for operating margin is operating income divided by net sales. Return on sales is extremely similar except the numerator is usually written as earnings before interest and taxes (EBIT) while the denominator is still net sales.


What Are Other Cryptoccurencies Before Bitcoin?

Response: eCash, B-money, Bit Gold, and Hashcash are other early cryptocurrencies that were very influential in Bitcoin's creation.


Is a Digital Wallet the Same as a Mobile Wallet?

Response: Though digital wallets and mobile wallets are very similar, they aren't the same. Digital wallets are typically meant for online transactions, whereas mobile wallets are tied to a smartphone or wearable device. Both connect to bank accounts and credit cards for purchasing on the go.


Response: An inverted yield curve occurs when short-term interest rates exceed long-term rates. This isn’t usually a great sign. Historically, an inverted yield curve has been viewed as a signal of a looming recession.


Response: An at-the-opening order instructs one's broker to buy or sell a security for their account right at the very beginning of the trading day. If the order cannot be executed at the opening of the market, it will be canceled.


What Are the Pros and Cons of a Limited Liability Company?

Response: The pros of a limited liability company (LLC) include the protection of personal assets by legally separating the owner's personal assets from their business assets, pass-through taxation, and easier filing taxes. The cons include being more costly to set up and maintain than a general partnership or sole proprietorship, more difficult to transfer ownership, and typically higher taxes.


Response: Spread betting is a way to bet on the change in the price of some security, index, or asset without actually owning the underlying instrument.


Response: Yes, all debit cards require a PIN number. However, be mindful that not all debit card transactions require the use of a PIN number. The transaction itself, your recent purchasing history, or the vendor purchasing from may influence the security checks implemented by the issuing bank.


How Long Can I Carry Forward Capital Losses?

Response: Capital losses can be carried forward indefinitely until fully utilized or exhausted. There is no expiration date for capital loss carryovers.


Response: The MICR system has been in use since the late 1950s. It was a notable improvement because it allowed for the mechanization of check processing while making it more difficult to commit check fraud. Banks around the globe adopted the system.This is why the format of bank checks is so uniform. It has to be in order for the readers to read the MICR numbers.


Response: Unfortunately, if you are unable to pose bail, you will likely remain in jail until after your case is resolved.


Response: Form 1095-C is provided by your employer (if it has 50 or more full-time employees.) It is also available on the IRS website.


Response: If you are a bank’s customer, you may be able to deposit cash or checks via one of their ATMs. To do this, you may simply need to insert the checks or cash directly into the machine. Other machines may require you to fill out a deposit slip and put the money into an envelope before inserting it into the machine. Be sure to endorse the back of any checks and note “For Deposit Only” to be safer.


Do Vehicles Qualify for Bonus Depreciation?

Response: Yes, businesses can deduct and depreciate 100% of the cost of a vehicle or truck under bonus depreciation rules. Note that this will be different than Section 179 rules; though a vehicle or truck is often a qualifying asset, it will be subject to a deduction up to a specific dollar amount. Also, luxury vehicles are limited by the luxury automobile limitations in depreciation.


Response: Exchange rates can differ within the same country. Some countries have restricted currencies, limiting their exchange to within the countries' borders and often there is an onshore rate and an offshore rate. A more favorable exchange rate can often be found within a country's borders versus outside its borders and a restricted currency has its value set by the government. China is an example of a country that has this rate structure and a currency that is controlled by the government. Every day, the Chinese government sets a midpoint value for the currency, allowing the yuan to trade in a band of 2% from the midpoint.


What Are the Prominent Roles in a VC Firm?

Response: Each VC fund is different, but their roles can be divided into roughly three positions: associate, principal, and partner. As the most junior role, associates are usually involved in analytical work, but they may also help introduce new prospects to the firm. Principals are higher-level and more closely involved in the operations of the VC firm's portfolio companies. At the highest tier, partners are primarily focused on identifying specific businesses or market areas to invest in and approving new investments or exits.


Response: Affiliate marketers get paid a commission for referring customers to companies where they make purchases. These commissions can range from less than 1% to 20% or more, depending on the product and level of referral volume. For online campaigns, a customized link or referral code is used to track sales. In this sense, it is a source of passive income since the affiliate can continue to earn money once they have set up their campaign.


Response: Most domestic wire transfers are completed within 24 hours. International wire transfers can take a few days. Certain wire transfers, such as those within the same financial institution can often be done immediately.


How Do I Research Stocks Before Buying Them?

Response: As an investor researching stocks, you should aim to collect a broad range of information about the company. This includes recent government filings, news articles, press releases, statements or activity on social media, and the company's financial statements. You can also leverage information from other analysts, as professionals may publicly give their opinion about the position of the company. This insight can be used to form your own opinion on future price movement.


What Is the Formula for an Indifference Curve?

Response: The formula used in economics for constructing an indifference curve is:𝑈(𝑡, 𝑦)=𝑐where:c stands for the utility level achieved on the curve and is constant.t and y are the quantities of two different goods, t and y.Different values of c correspond to different indifference curves, so if we increase our expected utility, we obtain a new indifference curve that is plotted above and to the right of the previous one.


Response: Companies give bonuses to employees for a variety of reasons, such as to:Encourage certain behavior: Bonuses can be used as an incentive to encourage employees to perform at their best or to achieve certain goals.Reward good performance: Bonuses can be given to recognize and reward employees for exceptional performance or for meeting certain performance targets.Show appreciation/Boost morale: Bonuses can be given as a way for companies to show appreciation to their employees and boost morale.Retain key employees: Companies may offer retention bonuses to key employees to encourage them to stay with the company, especially during times of economic uncertainty or organizational change.Attract top talent: Companies may offer signing bonuses to top-talent candidates as an incentive to accept a job offer, especially if they are being aggressively pursued by rival firms.Share company success: In addition to rewarding employees, companies may distribute bonuses to shareholders through a special dividend or a bonus issue, which is an offer of free additional shares of the company's stock.


What 3 Things Played a Role in the Industrial Revolution?

Response: Technological changes, such as the use of iron and steel, new energy sources such as coal and steam, and the factory system, led to a division of labor and specialization, which increased efficiency.


When and Why Did Nixon End the Gold Standard?

Response: President Richard Nixon closed the gold window in 1971 in order to address the country's inflation problem and to discourage foreign governments from redeeming more and more dollars for gold.


When Did the U.S. Abandon the Gold Standard?

Response: The U.S. officially stopped using the gold standard in 1971 under President Nixon. At the time, inflation was growing and there was a gold run on the horizon. Nixon's administration ended the dollar convertibility to gold, which ended the Bretton Woods System.


What Are the Advantages of Using the Equity Method?

Response: Using the equity method of accounting provides a more complete and accurate picture of the economic interest one company (the investor) has in another (the investee). This allows for more complete and consistent financial reports over time and gives a more accurate picture of how the investee's finances can impact the investor's.


Response: According to the Bureau of Labor Statistics, the labor force is made up of the employed and the unemployed. Those who have jobs are employed. Those who are jobless, looking for a job, and available for work, are unemployed.


Response: For 2023 taxes, filing is due by April 15, 2024. If you need an extension, you must also request it by this date. If your extension is granted, you then have till Oct. 15, 2024, to file your taxes.


Response: Price ceilings and price floors are the two types of price controls. They do the opposite thing, as their names suggest. A price ceiling puts a limit on the most you have to pay or that you can charge for something—it sets a maximum cost, keeping prices from rising above a certain level.A price floor establishes a minimum cost for something, a bottom-line benchmark. It keeps a price from falling below a particular level.


What Is the Benefit of an Irrevocable Trust?

Response: By placing assets into an irrevocable trust, you give up control and ownership of them. This means they will not be considered part of your estate, which helps to minimize estate tax after you die and avoid the probate process.


How Can You Nullify a Voidable Contract?

Response: A contract can be nullified if it contains terms that are considered illegal or unreasonable in a certain jurisdiction. In addition, courts may also invalidate a contract if it is found that either party was incapable of entering a legal contract at the time it was signed. For example, most legal contracts are not enforceable if the signatory has not reached the age of adulthood.


Who Approves ISO International Standards?

Response: The ISO standards are internationally agreed upon by experts in the related fields. These are people who know what their industries need, individuals such as manufacturers, sellers, buyers, customers, trade associations, users, or regulators.


What Inspired Friedman to Become an Economist?

Response: Friedman, who was born in 1912, said that the Great Depression was of one of the most important factors influencing his decision to become an economist. He wanted to investigate the causes and consequences of such widespread economic misery.


What's the Difference Between Market Value and Intrinsic Value?

Response: Market value equates to the current price of a particular asset. For example, the market price of a share of ABC Company stock may be $50 as of yesterday's market close. It may have a market price (value) of $55 at some point today, depending on buying interest. However, intrinsic value is the true value of the company, as determined using a valuation model.