What Is the Disadvantage of Issuing Shares?

Response: The disadvantages of going public include following extra regulations and disclosure requirements. Being a publicly traded company can bring extra scrutiny and increase accounting and other costs.Issuing more shares later also has disadvantages. Shareholders generally don’t like being asked to cough up more money if they don’t wish to have their ownership stake diluted. Rights issues can damage a company’s reputation and make investors want to steer clear. Thus, to raise the required funds, it’s usually necessary to offer the new shares at a notable discount to their current price.


What Does the "X" Stand for in Generation X?

Response: The letter "X" refers to an unknown variable (as in mathematics), or to the generation's desire not to be defined.


Response: MBA stands for Masters of Business Administration. An MBA is an advanced degree that provides theoretical and practical training in business principles and leadership skills. MBA recipients obtain this postgraduate degree to further enhance their marketability as a professional.


Why Are Oil Reserves Important to the United States?

Response: The Strategic Petroleum Reserve (SPR) is an emergency supply of crude oil that can be used to offset a severe oil supply shortage. The SPR was created to provide the United States with crude oil in the event of a severe oil supply or economic disruption. Only the President of the United States can give permission to use it and maintaining the Strategic Petroleum Reserve is an important national security tool and the reserve is intended to serve as America’s insurance policy against a severe oil supply disruption or a severe economic disruption.


Response: The step-up in basis is a duly legislated provision of the U.S. tax code, though it is certainly responsible for a significant loss of public revenue. Because the exemption from capital gains taxes on assets held until death disproportionately benefits the wealthiest households, disparaging descriptions are likely to persist.


What are the Three Different Hedge Accounting Models?

Response: Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) topic 815 addresses derivatives and hedging. There are three categories of hedge accounting described in ASC 815:Fair value hedgesCash flow hedgesNet investment hedges


Response: As the term "counter" implies, a counter-cyclical stock is noncyclical. Its price is inclined to move in the opposite direction from that in which the economy appears to be headed. The prices of these stocks tend to go up when the economy is struggling and a recession is looming or has already begun.


Can a Company Have a Negative Total Enterprise Value (TEV)?

Response: Yes. It is possible for a company to have more cash than its market value and debt. In theory, that would make it an attractive investment.


Response: The Federal Reserve Act created the Federal Reserve System after it was passed by Congress in 1913. The Fed was originally created to combat banking "panics" that were causing havoc on the U.S. banking system at the time.


What Does the Phrase Glass Ceiling Mean?

Response: The glass ceiling is a metaphor that refers to the barrier that marginalized people, such as women and minorities, encounter when seeking career advancements.


Can I Open a Health Savings Account (HSA) If I’m Self-Employed?

Response: You can open a Health Savings Account (HSA) if you have a high-deductible health plan. If you are self-employed, you can look into HSAs offered by brokerages or banks like Fidelity, HealthEquity, or Lively. Research your options carefully to ensure you get the best HSA to suit your needs.


Response: You should take the standard deduction or itemize deductions depending on which results in a lower tax bill.You may have to estimate your allowable deductions, at least roughly, to figure that out. Also, keep in mind that you have to maintain records and receipts of deductible expenses throughout the year in order to back up the numbers you enter on Schedule A.There may be some years when you have good reason to itemize your deductions. For example, if you have very high unreimbursed medical expenses for one year, they could amount to tax savings greater than the standard deduction.


Response: Advocates say that social justice is worth pursuing because it defends people from suffering deprivations due to unfair prejudices and because it tries to provide everyone with the essentials for a good life.


Response: The acronym "IRA" is used to refer to two distinct but overlapping concepts. For the Internal Revenue Service, the term stands for "individual retirement arrangement," a selection of plans available that provide tax advantages to people saving for retirement.In common usage, IRA also stands for "individual retirement account," or a type of plan that one can pay into throughout their career and withdraw from in retirement. In such cases, a plan would be both a retirement account for a specific person, as well as an individual retirement arrangement in the eyes of the IRS.


How Much Money Do You Need to Trade on Margin?

Response: FINRA rules require that investors “deposit with your brokerage firm a minimum of $2,000 or 100% of the purchase price of the margin securities, whichever is less,” according to the U.S. Securities and Exchange Commission (SEC). However, if the brokerage designates you as a pattern day trader, then the cash requirement rises to a minimum of $25,000.


Response: Many lenders require a minimum front-end ratio of 28% to approve you for a mortgage. The lower your front-end and back-end ratios, the more likely you are to qualify for a mortgage.


Why Do Bonds With Lower Ratings Have Higher Yields?

Response: Bonds with lower ratings have a greater risk of default than bonds with higher ratings. These bonds tend to have higher yields so as to still be able to entice investors, despite bringing greater risk.


Response: By March 2023, the Great Resignation showed signs of slowing down as fewer workers quit their jobs and the job market became more competitive.


Response: The analyst or researcher establishes a null hypothesis based on the research question or problem that they are trying to answer. Depending on the question, the null may be identified differently. For example, if the question is simply whether an effect exists (e.g., does X influence Y?) the null hypothesis could be H0: X = 0. If the question is instead, is X the same as Y, the H0 would be X = Y. If it is that the effect of X on Y is positive, H0 would be X > 0. If the resulting analysis shows an effect that is statistically significantly different from zero, the null can be rejected.


How Much Does It Cost to Produce a Dollar Bill?

Response: The cost to produce a U.S. dollar in 2022 is 7.5 cents. This means the seigniorage is 92.5 cents per dollar bill.


Response: In Laissez-Faire capitalism, companies could operate with a pure profit motive and not have to worry about government regulation or taxation. This, of course, could create negative externalities and information asymmetries that can allow producers to behave as bad actors and get away with it. Proponents of Laissez-Faire say that costly and exhaustive regulation is not needed since the market would weed out such bad actors. In reality, however, bad actors may continue operating for a long while. For instance, if a vitamin company is filling their capsules with sawdust instead of herb powder, it may remain unknown without government testing and regulatory oversight to protect consumers.


How Does the Fed Use Interest Rates in the Economy?

Response: The Federal Reserve, along with other central banks around the world, uses interest rates as a monetary policy tool. By increasing the cost of borrowing among commercial banks, the central bank can influence many other interest rates such as those on personal loans, business loans, and mortgages. This makes borrowing more expensive in general, lowering the demand for money and cooling off a hot economy. Lowering interest rates, on the other hand, makes money easier to borrow, stimulating spending and investment.


What Is the Elasticity of Demand Formula?

Response: The elasticity of demand can be calculated by dividing the percentage change in the quantity demanded of a good or service by the percentage change in price. It reflects how demand for a good or service changes as its quantity or price varies.


Response: John Maynard Keynes (1883–1946) was a British economist, best known as the founder of Keynesian economics and the father of modern macroeconomics. Keynes studied at one of the most elite schools in England, the King's College at Cambridge University, earning an undergraduate degree in mathematics from the latter in 1905. He excelled at math but received almost no formal training in economics.


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

Response: The main difference between an annuity due and an ordinary annuity is when the payments are required. Annuity due payments are required at the beginning of the period, whereas an ordinary annuity requires the payment at the end. Annuity due payments tend to favor the recipient, as it provides them access to capital at the beginning of the period, which they can then use to invest.


Response: One consideration to keep in mind with TOD accounts is that the assets are still considered part of the estate of the deceased. That means that creditors can seek to have debts repaid before beneficiaries have access to the assets.


Response: Under the Fair Credit Billing Act, "account in dispute" refers to the 90-day period in which a credit issuer is investigating a consumer's dispute. The credit issuer must either remedy the situation or send a letter to the consumer explaining why it considers the dispute invalid.


Response: Gold options are available the U.S. through the Chicago Mercantile Exchange (CME). These options contracts use gold futures as their underlying asset. To trade gold options, you will need a margin brokerage account with access to options markets. You could contact your current broker to see if they offer options trading or shop around for an options trading account.


Response: A reverse ICO refers to the launch and sale of a cryptocurrency token by a preexisting company. Reverse ICOs can be used to generate funds for the company, to facilitate decentralizing through a new crypto token, or to expand into the blockchain and cryptocurrency industries.


How Can Porter's Five Forces Address the Affects of Globalization on an Industry?

Response: Porter's model has been used to analyze how globalization affects industry competition. For instance, globalization lowers barriers to entry in specific industries, intensifying the threat of new entrants from different regions. It can also expand the pool of potential substitutes and alter the power dynamics with suppliers and customers worldwide. While Porter and others were doing this analysis for industries facing global competition decades ago, it's still applicable to sectors undergoing this process in the 2020s.


Response: In insurance, risk overhang refers to situations where continuous exposure to past transactions can limit an insurer's actions in the present. This is usually the case when an insurer has to pass on lucrative opportunities because they cannot take on any more risk.


Why Didn't I Receive a Form 1099-DIV Even Though I Was Paid Dividends?

Response: You only receive Form 1099-DIV if you received dividends exceeding $10. If your dividend payments were more than this and you still haven't received a form, contact the issuer for a replacement.


Response: The Federal Reserve sets the rate for its Overnight Reverse Repurchase (ON RREP) Agreement Facility, where it buys and sells securities. This rate helps set the bottom number for the rate range. It also pays Interest on Reserve Balances (IORB), the rate of which helps set the top number for the range. The Fed also uses the rate at its discount window and open market operations to help establish interest rates that it believes will influence the economy to produce an average inflation rate of 2% over the long run.


What Are the Main Differences Between Private and Public Goods?

Response: A private good is consumed exclusively by one person. Most often, there is a cost associated with it that prohibits its use by some others. A private good is available to all. One person's use of it does not prevent others from using it.


Response: Surplus is the amount of an asset or resource that exceeds the portion that is utilized. To calculate consumer surplus one merely needs to subtract the actual price the consumer paid by the amount they were willing to pay.


Response: Money laundering red flags include suspicious or secretive behavior by an individual around money matters, making large transactions with cash, owning a company that seems to serve no real purpose, conducting overly complex transactions, or making several transactions just under the reporting threshold.


What Are the Limitations of the Black-Scholes Model?

Response: The Black-Scholes model is only used to price European options and does not take into account that American options could be exercised before the expiration date. Moreover, the model assumes dividends, volatility, and risk-free rates remain constant over the option's life.Not taking into account taxes, commissions or trading costs or taxes can also lead to valuations that deviate from real-world results.


What Are the Types of Financial Statements?

Response: While there are many types of financial statements, the big three are:Balance sheet, which lists a business’ assets/revenues, liabilities/obligations, and owners’ equity at a specific point in time.Income statement, which summarizes results from business operations—revenues, expenses, and profits or losses during a specific period.The cash flow statement complements the balance sheet and income statement. Categorized into operating, investing, and financing activities, it captures how funds are employed—literally, how the cash flows—throughout the business.


How Do You Find the Upper Quartile of a Data Set?

Response: A spreadsheet and the QUARTILE function is the quickest way to find the upper quartile. For example, the function "=QUARTILE(A1:A53,3)" returns the third (upper) quartile of your dataset.


What Is the Best Asset Allocation Strategy for My Age?

Response: Generally, the younger and further you are from needing to access the capital invested, the more you should invest in stocks. One common guideline that’s ordinarily quoted is that you should hold a percentage of stocks that is equal to 100 minus your age. So, if you are 30, 70% of your portfolio should supposedly consist of stocks. The rest would then be allocated to safer assets, such as bonds. But a lot of these rules don't work for everyone. For advice that reflects your personal circumstances, reach out to a financial advisor.


Response: If you are a U.S. citizen, the U.S. taxes your worldwide income, no matter where you live. To avoid double taxation, the U.S. lets you tax credit for foreign taxes you pay or accrue. U.S. citizens and resident aliens who paid foreign income tax and are subject to U.S. tax on that same income can take the foreign tax credit. A nonresident alien can take the credit if they were a bona fide resident of Puerto Rico for the entire tax year or paid foreign income taxes connected to a trade or business in the U.S.


Response: It is possible for an attacker to hack into a device using NFC technology, although the likelihood of this happening these days is relatively low. NFC operates over very short distances, typically less than four inches, so an attacker would need to be in close proximity to the device in order to access it. Additionally, most NFC-enabled devices are configured to only establish a connection when the user specifically allows it, so an attacker would need to trick the user into initiating the connection.However, even if an attacker is able to establish an NFC connection with a device, they would still need to find a way to exploit a vulnerability in the device's software in order to gain access. This is not necessarily an easy task, and the level of difficulty would depend on the specific device and its security measures. In general, it is always a good idea to keep your device up to date with the latest security patches and to be cautious when connecting to unfamiliar devices using NFC.


Response: In 2018, the CFDA was integrated into other government systems and is now accessible through the Assistance Listings section of SAM.gov.


Response: Depending on the publication, INSEAD can be considered a better MBA degree than Harvard. According to the Financial Times, in 2023, INSEAD ranked number two for best MBA programs while Harvard ranked number four.


Is Racketeering the Same as Money Laundering?

Response: Money laundering involves cleaning "dirty" money so that it appears as if it were earned legitimately when it was not. Money laundering can fall under the umbrella of racketeering if it is part of an organized scheme.


What Are the Types of Frequency Distribution?

Response: The types of frequency distribution are grouped frequency distribution, ungrouped frequency distribution, cumulative frequency distribution, relative frequency distribution, and relative cumulative frequency distribution.


What Is the Difference Between Technical Analysis and Fundamental Analysis?

Response: Both technical analysis and fundamental analysis are used by traders and investors in picking an investment as well as when to enter and exit the investment. Technical analysis uses historical data, mainly price and volume data to chart and predict an asset's future movements. Fundamental analysis aims to understand intrinsic value by analyzing economic and financial factors, such as the information found in a company's financial statements and how the macroeconomy will impact an asset.


Why Is Infrastructure Important to a Society?

Response: Infrastructure powers businesses and connects workers to their jobs and citizens to opportunities for healthcare and education. It creates opportunities within communities and an economy needs reliable infrastructure to connect supply chains and move goods and services.


Response: The opposite of a triple bottom pattern, a triple top pattern is a bearish chart pattern that suggests a move to the downside.


Response: An MLS number is essentially a serial number for each property on the market. It was created to make it easier to differentiate properties and find properties quickly. In contrast, the NMLS number, while similar and involved in real estate transactions, is issued by the Nationwide Multistate Licensing System and is permanently assigned to each individual who works as a mortgage loan officer.


Response: A double-dip recession is a term used to refer to a recession that is followed by a short-lived recovery, and then is followed by yet another recession. Such a relapse into recession after already being in a recession isn't uncommon as investors start to question the conviction of a recovery based on new or changing information.


Do Jumbo CDs Earn a Higher Interest Rate than a Normal CD?

Response: Since jumbo CDs require a much higher minimum deposit, banks and credit unions typically reward savers with higher interest rates than for smaller accounts. Longer terms also earn higher interest rates. Those higher rates are an incentive to reduce the liquidity of your savings.


Response: Nonforfeiture clauses offer protection in the event that a policyholder stops paying their premium. Sometimes, a policy expires after a so-called grace period. If cash has accumulated in the policy, state law forbids companies from keeping it and canceling the policy.


What Is a Simple Explanation of the Law of Supply and Demand?

Response: If you've ever wondered how the supply of a product matches demand or how market prices are set, the law of supply and demand holds the answers. Higher prices cause supply to increase while demand drops. Lower prices boost demand while limiting supply. The market-clearing price is one at which supply and demand are balanced.


Response: The idea behind bootstrapping is to temporarily find solutions to meet business needs until more permanent solutions are possible. It is usually not in the best interest of the company to permanently bootstrap as this exposes a company to higher financial risk than necessary. Bootstrapping may also be taxing to the owner who often prefers to have a more stable, scalable strategy to develop their company.


What Does Demand-Pull Mean in Economics?

Response: Demand-pull is a form of inflation. It refers to instances when demand for goods and services exceeds the available supply of those goods and services in the economy. Economists suggest that prices can be pulled higher by an increase in aggregate demand that outstrips the available supply of goods in an economy. The result can be inflation.


Response: The 2021 mortality rate in the United States was 835.4 deaths per 100,000 people. This meant an average life expectancy of 76.1 years. However, your expected mortality changes as you get older. The life expectancy for a 65-year-old was 83.4 years in 2021.


What Is the Central Limit Theorem (CLT) and How Does It Relate to PDFs?

Response: The central limit theorem (CLT) states that the distribution of a random variable in a sample will begin to approach a normal distribution as the sample size becomes larger, regardless of the true shape of the distribution. Thus, we know that flipping a coin is a binary process, described by the binomial distribution (heads or tails).However, if we consider several coin tosses, the odds of getting any particular combination of heads and tails begin to differ. For instance, if we were to flip the coin 10 times, the odds of getting five of each are most likely, but getting 10 heads in a row is extremely rare. Imagine 1,000 coin flips, and the distribution approaches the normal bell curve.


Response: U.S. savings bonds, including Series I bonds, can only be purchased online from the U.S. Treasury, using the TreasuryDirect website. You can also use your federal tax refund to purchase Series I bonds.


Response: The simple answer is yes. A corporation can consist of just one person. S Corps and C Corps are popular options for corporations with one or a small number of owners. A regular corporation can also be just one person. However, LLCs are often a better option when there is just one owner. They can even elect for S Corp taxation if it's advantageous to them.


Is It Okay to Use Some Medicines After Their Expiration Dates?

Response: It is a bad idea to use any medicine after its expiration date. It is no longer guaranteed to be safe or effective, according to the Food & Drug Administration (FDA).For that matter, the FDA warns that medicines should be stored properly to remain good until their expiration dates. If they don't need to be refrigerated, store them in a cool dry place (not the bathroom cabinet).


What Is an Example of Deferred Tax Liability?

Response: A deferred tax liability usually occurs when standard company accounting rules differ from the accounting methods used by the government. The depreciation of fixed assets is a common example.Companies typically report depreciation in their financial statements with a straight-line depreciation method. Essentially, this evenly depreciates the asset over time.But for tax purposes, the company will use an accelerated depreciation approach. Using this method, the asset depreciates at a greater rate in its early years. A company may record a straight-line depreciation of $100 in its financial statements versus an accelerated depreciation of $200 in its tax books. In turn, the deferred tax liability would equal $100 multiplied by the tax rate of the company.


How Does Monetary Policy Affect Scarcity?

Response: In the U.S., the Federal Reserve controls the money supply. When governments print too much money, the value of the money decreases. Supply is high and money is less scarce. However, too much money in an economy can lead to inflation. Governments tend to keep the money supply relatively scarce through contractionary policy. The main contractionary policies employed by the United States include raising interest rates, increasing bank reserve requirements, and selling government securities.


Response: There’s no set limit on how many lines of credit you can have open at one time. However, applying for too many cards in a short period can hurt your credit score. Consider how much credit you actually need before opening a new card account.


Response: Inflation is the decline of purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time. The rise in the general level of prices, often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.


What Are the Open, High, Low, and Close Prices?

Response: These prices monitor the value of a stock over a period of time. An open or opening price is the first price a stock trades at when the market opens in the morning. The closing price is the last price of the day. High and low prices track whether a stock has lost or gained value during the day.


Response: Delta is a measurement of how much the price of an option is likely to go up or down based on the price of the underlying security. It's gauged by each $1 change. An option's price should increase by $0.15 for each dollar change in the security's price if the Delta is 0.15.


What Does a Negative Cash Flow From Financing Mean?

Response: A negative number can show that a company is paying off debt, making dividend payments or buying back its stock.


Response: Not really. An investment is typically a long-term commitment, where the payoff from putting that money to work can take several years. Investments are typically made only after due diligence and proper analysis have been undertaken to understand the risks and benefits that could unfold. Speculation, on the other hand, is a pure directional bet on the price of something, and often for the short-term.


Response: Orders allow traders to enter or exit a trade at a specific price and during a set timeframe. Trading orders are used to maximize profits and limit losses. They can also allow traders to take advantage of sudden or unexpected price movements.


What Is the Difference Between a Keogh and IRA?

Response: Keogh plans are designed for the self-employed. While the self-employed can contribute to an IRA, Keogh plans have much higher contribution limits.


Does Subrogation Affect the Insured Victim?

Response: The subrogation process, which is meant to protect insured parties, is very passive for the insured victim of an accident from the fault of another insured party. The insurance companies of the two parties involved work to mediate and legally come to a conclusion over the payment. Policyholders are simply covered by their insurance company and can act accordingly. It benefits the insured in that the at-fault party must make a payment during subrogation to the insurer, which helps keep the policyholder's insurance rates low.


What Happens to Group Life Insurance Coverage After I Retire?

Response: Once you leave the organization, group life insurance terminates (either immediately or after a short grace period). This includes being fired, quitting, changing jobs, or retirement. Certain employees may be able to convert their group coverage into an individual policy upon retirement, but the employer may not continue to pay these premiums.


Do I Have to Use All of the Money in My HSA Every Year?

Response: Unlike a Flexible Spending Account (FSA), contributions to your Health Savings Account (HSA) can roll over yearly. Since the funds can also be invested, you can build capital for more significant medical needs or use it as an investment fund after retirement.


Response: There are many steps to building a business model, and there is no single consistent process among business experts. In general, a business model should identify your customers, understand the problem you are trying to solve, select a business model type to determine how your clients will buy your product, and determine the ways your company will make money. It is also important to periodically review your business model; once you've launched, feel free to evaluate your plan and adjust your target audience, product line, or pricing as needed.


What Is the Main Objective of a Feasibility Study?

Response: A feasibility study is designed to help decision-makers determine whether or not a proposed project or investment is likely to be successful. It identifies both the known costs and the expected benefits.In business, "successful" means that the financial return exceeds the cost. In a nonprofit, success may be measured in other ways. A project's benefit to the community it serves may be worth the cost.


Response: While a judgment should not be ignored, there are ways to protect some property from being collected. Most state laws offer exemptions that protect certain types of property, such as a primary home or vehicle, as long as the value of that property is below a certain limit.In addition, some types of personal property can be protected under a chapter 7 bankruptcy, allowing debtors to discharge their obligations without giving up their basic property.


Do You Get Out of All Your Debts if You File for Bankruptcy?

Response: Bankruptcy can renegotiate or erase many types of unsecured debts, such as those on credit cards or personal loans. Other debts cannot be discharged in bankruptcy. The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged:Alimony and child supportCertain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several yearsDebts for willful and malicious injury to another person or property (“Willful and malicious” here means deliberate and without just cause. In Chapter 13 bankruptcy, this applies only to injury to people; debts for property damage may be discharged.)Debts for death or personal injury caused by the debtor’s operation of a motor vehicle while intoxicated from alcohol or impaired by other substancesDebts that you failed to list in your bankruptcy filingCommon/maintenance fees for condo association (or similar)


Response: Vendor financing is financing that a business obtains directly from the vendor when purchasing inventory or equipment. Vendor financing stands in contrast to traditional methods of financing, such as obtaining a loan from a bank. Vendor financing is often a deferred loan and can lead to building a strong relationship between a vendor and a customer.


Response: EPLI, or Employment Practices Liability Insurance (EPLI) is different from ELI or Employers' Liability Insurance. Employers need to buy EPLI to make sure that they are covered from employee lawsuits that allege discrimination, sexual harassment, or wrongful termination -- none of which are covered by Employers' Liability Insurance.


Which Is Higher Internal Growth Rate or Sustainable Growth Rate?

Response: Sustainable growth rate is always higher than an internal growth rate because it factors in leverage, or debt.


What are the Key Differences between a Volatility Skew and a Volatility Smile?

Response: While both volatility skew and volatility smile relate to the IV across different strike prices, they represent different market expectations and conditions. The volatility skew typically reflects a greater fear of downside risk, while the smile suggests a higher probability of large price moves in either direction.


Response: Yes, NSF fees are legal on bounced checks and should not be charged on debit card transactions or ATM withdrawals. The U.S. government doesn't regulate NSF fees or the size of fees but The Truth in Lending Act does require banks to disclose their fees to customers when they open an account.


Response: A life insurance policy can avoid triggering MEC status as long as the amount of cash held in the policy remains beneath the required corridor below the death benefit. If you use a policy to accumulate cash value, one solution is to increase the death benefit through paid-up additional insurance (PUA), which raises the corridor's ceiling.


Is Equity Financing Riskier Than Debt Financing?

Response: Equity financing comes with a risk premium because if a company goes bankrupt, creditors are repaid in full before equity shareholders receive anything.