Response: It is difficult to pigeonhole Keynes as a socialist.On the one hand, he showed an interest in socialist regimes and advocated the presence of government in economic affairs. He emphatically did not believe in letting business cycles go through boom and bust without intervention—or in letting private enterprise operate unfettered.On the other hand, Keynes stopped short of advocating that governments actually take over and run industries. He wanted central authorities to stimulate, but not necessarily control, methods of production.There is also evidence that he was returning to more traditional free-market capitalism towards the end of his life, as he was considering ways to get post-war Britain out of an economic hole. Shortly before his death in 1946, he told his friend, Henry Clay, that he found himself relying more on a solution he had “tried to eject from economic thinking twenty years ago": Adam Smith’s invisible hand (the natural tendency of a free-market economy to self-correct via the laws of supply and demand).


What Are the Requirements for an Implied Contract?

Response: Requirements for an implied contract differ based on the type of implied contract that is assumed. Neither are formed orally or in writing. For an implied-in-fact contract, there must be an offer, an acceptance of the offer, mutual agreement, and consideration. The terms and execution of the agreement will be evidenced by the behavior of the parties involved. For an implied-in-law contract, circumstances form the contract, rather than intent. When services or goods are not gratuitously provided to one party, the receiver is expected to offer consideration. There cannot be an imbalance of benefit between the parties, meaning the receiver cannot be unfairly enriched.


Response: Incidentals are costs related to other, larger business costs. These include expenses such as fees and tips to hotel staff, transportation between your hotel and a meal, and the cost of mailing a business-related gift.


Response: The U.S. Constitution requires that at least 51 senators be present to do business.


Response: It depends. Managing property can be costly and take a lot of time. If the cost of a property manager is less than the opportunity cost of managing properties yourself, it’s probably a good investment. However, this is an equation that every investor will have to work through for themselves.


Response: This term implies that a business has applied for and holds a valid license, obtained from the proper authority, to legally operate or do business in a certain location or locations.


Should I Look Into Buying a Cash Value Life Insurance Policy?

Response: Those looking to build a nest egg over a time horizon of several decades may want to consider cash value life insurance as a savings option, alongside a retirement plan like an IRA or 401(k). Be aware that cash values often don't begin accruing until two to five years have passed. And you may have to wait several years to access the cash value, or pay a penalty.


Are Back-to-Back Letters of Credit Irrevocable?

Response: Typically, both letters of credit are irrevocable letters of credit. Each letter can't be canceled or modified without all participants' explicit agreement. Amendments can be complicated with a back-to-back letter of credit situation, as the second letter depends on the first.


Response: Membership in NAIFA is $565 annually, which includes local, state, and national dues.


What Is the Formula or Model for Trend Analysis?

Response: There is no one formula for trend analysis, as the specific methods used to analyze trends can vary depending on the data being analyzed and the goals of the analysis. However, there are several statistical measures that are commonly used in trend analysis to identify patterns and trends in data.Here are a few examples of statistical measures that might be used in trend analysis:Moving averages: A moving average is a statistical measure that is used to smooth out fluctuations in data over time. A simple moving average (SMA) is calculated by taking the average of a set of data points over a given period of time, such as the past 10 days or the past 50 weeks. Moving averages can be used to identify trends by smoothing out short-term fluctuations in data and highlighting longer-term patterns.Linear regression: Linear regression is a statistical method that is used to model the relationship between two variables. It can be used to identify trends by fitting a line to the data and determining the slope of the line, which can indicate the direction and strength of the trend.Correlation: Correlation is a statistical measure that indicates the strength and direction of the relationship between two variables. A positive correlation means that the variables are moving in the same direction, while a negative correlation means that they are moving in opposite directions. Correlation can be used to identify trends by analyzing the relationship between two variables over time.It's important to note that these are just a few examples of statistical measures that might be used in trend analysis, and there are many other methods and measures that could also be used depending on the specific needs of the analysis.


What Are Some Examples of C2C Companies?

Response: In e-commerce, some big names in C2C include eBay, Etsy, Craigslist, Ali Express, and Amazon Marketplace. Some C2C payments companies include Venmo, Paypal, and Zelle.


Response: The Federal Reserve System is not owned by anyone. It was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors is an agency of the federal government and reports to and is directly accountable to Congress.


What Are Some Limitations of Break-Even Analysis?

Response: Break-even analysis assumes that the fixed and variable costs remain constant over time. Costs may change due to factors such as inflation, changes in technology, or changes in market conditions. It also assumes that there is a linear relationship between costs and production. Break-even analysis ignores external factors such as competition, market demand, and changes in consumer preferences.


Response: Kanban bridges both agile and lean frameworks. It is agile in that processes are visually depicted in advance of occurring. This means changes can be made in advance of issues. In addition, kanban is a pull system in that work is pulled through a process when each prior step is completed. Instead of having inventory pile up from one stage to another, kanban aims to have just enough inventory working its way through a manufacturing process.


What Are the Long-Term Consequences of Banking Sector Hysteresis?

Response: The banking sector's hysteresis, arising from financial crises, can lead to persistent cautious lending practices even after the crisis abates. This ongoing prudence in lending may contribute to a prolonged credit squeeze, making it tough for consumers and businesses to get loans.


Response: Economic profits are the theoretical profits that result when company management subtracts all expenses plus the costs of lost opportunities from revenue earned in a particular period of time.


Response: Many consider it important for the measurable and consistent improvements in operations and business results that companies achieve using it. It also might be considered important because it combines the significant process streamlining of the Lean methodology of the 1940s with the Six Sigma data-driven approach of the 1980s.


What Is the Difference Between a VEBA and an HSA?

Response: Health Savings Accounts (HSAs) allow you to save for qualified medical expenses on a tax-advantaged basis. These accounts are associated with high-deductible health plans. The main difference between a VEBA and an HSA is how they’re funded. VEBAs are funded only by the employer in most cases, while HSAs can be funded with employer and employee contributions.


Response: Quid is a slang term for the pound sterling issued by the United Kingdom. The pound is the name of the currency issued by the U.K., like the "dollar" is for the currency issued by the United States.


Response: The most common type of fidelity bond is the so-called business services bond, which is designed to protect against losses when an employee is on a customer’s premises. For example, if a window repair worker is sent to a home that was damaged by a storm and steals jewelry from the residence, the company may have exposure concerning their employee’s actions. Likewise, if a dog sitter were to use their access to a client’s home to steal money, or if a home health provider took clothes or a laptop from a client, then a fidelity bond tailored for such circumstances could provide the company with the coverage it needs.


What Are the Advantages of a Vendor Take-Back Mortgage?

Response: A vendor take-back mortgage allows people to buy property that they would not otherwise be able to afford, a transaction that works to the benefit of both buyer and seller.


Response: A trade line is automatically created for you when a new line of credit is started. For example, when you sign up for a new credit card, a new trade line is created specific to that individual line of credit. As you incur purchases on the card and pay off debt balances, a record of history is created.


Response: An estate that pulls in more than $600 in annual gross income must file Form 1041, U.S. Income Tax Return for Estates and Trusts. The estate may also have to pay quarterly estimated taxes.


What Forms of Depreciation Can Use the Half-Year Convention?

Response: The half-year convention can be used with any depreciation methods. The Internal Revenue Service (IRS) Modified Accelerated Cost Recovery System (MACRS) consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS), which typically has to be elected by the taxpayer unless required by the IRS.MACRS allows for three depreciation methods under GDS and one under ADS. The 200% declining balance, 150% declining balance, and straight line method can be used under GDS, but only the straight line can be used under ADS.


Response: Typically, a franchise agreement includes three categories of payment to the franchisor. First, the franchisee must purchase the controlled rights, or trademark, from the franchisor in the form of an upfront fee. Second, the franchisor often receives payment for providing training, equipment, or business advisory services. Finally, the franchisor receives ongoing royalties or a percentage of the operation's sales.


What Is the Cost Method of Accounting for Treasury Stock?

Response: The cost method of accounting values treasury stock according to the price the company paid to repurchase the shares, as opposed to the par value. Using this method, the cost of the treasury stock is listed in the stockholders' equity portion of the balance sheet.


Has Anyone Ever Won an Eminent Domain Case?

Response: Many people have won eminent domain cases in the sense that their fair market value claim was awarded. The claimant, in this case, would be an aggrieved property owner who can sue for a higher value than what the government assessed, although these cases are lengthy and extremely expensive to pursue. Most private property owners find it is easier to just accept the value and move on with their lives. It is nearly impossible to halt an eminent domain case, although it is possible to pursue further compensation.


What Should You Do if Your Social Security Number Is Stolen?

Response: Identity thieves are everywhere. Contact the Social Security Administration if you suspect that your number is stolen. The agency can help fix problems related to income. If you have problems with your credit, you must contact your financial institution and the credit reporting agencies (Equifax, Experian, and TransUnion). You can also file complaints with IdentityTheft.gov, the Internal Revenue Service, and the Internet Crime Center to report any suspicious activity.


How Can I Invest in the Nasdaq Composite Index?

Response: No, you can't invest in the Nasdaq Composite Index. But you can invest in a security that mimics its performance. There are assets like mutual funds or exchange-traded funds (ETFs) that are composed of the same stocks with the same weightings that try to at least match the index's performance.


What Are the Best Index Funds for Retirement?

Response: The best index funds for retirement offer growth potential and solid risk management that aligns with your time to retirement and risk tolerance. For long-term growth, consider broad-market equity index funds like the Vanguard Total Stock Market Index Fund (VTSAX) or the Fidelity 500 Index Fund (FXAIX). For diversification and income, bond index funds like the Fidelity Total Bond Fund (FTBFX) can be a good choice. Target-date retirement funds, which automatically adjust their allocation as your retirement approaches, can also be a convenient option for retirement planning.


Response: A wire transfer is most often used to transfer funds from one bank or financial institution to another. No physical money is transferred between banks or financial institutions when conducting a wire transfer. Instead, information is passed between banking institutions about the recipient, the bank receiving account number, and the amount transferred.The sender first pays for the transaction upfront at their bank. The sending bank sends a message to the recipient's bank with payment instructions through a secure system, such as Fedwire or SWIFT. The recipient's bank receives all the necessary information from the initiating bank and deposits its own reserve funds into the correct account.The two banking institutions then settle the payment on the back end (after the money has already been deposited).


Response: Kellogg's MBA is recognized globally and is in demand by many large or notable corporations and businesses. If you want to work for one of these companies, the program might be worth the cost, as you can recover the expenses within a few years. However, you can get a good business education at many other schools—but if you want one of the best educations around, the Kellogg MBA is worth it.


Response: Margin trades allow larger gains than regular investments, but also higher losses. These gains can be enticing in bull markets, but when the trades fail, an investor can owe more money than they originally had to trade with.


Response: Business forecasting tries to make informed guesses or predictions about the future state of certain business metrics such as sales growth or economy-wide predictions such as gross domestic product (GDP) growth in the next quarter. Business forecasting relies on both quantitative and qualitative techniques to improve accuracy. Managers use forecasting for internal purposes to make capital allocation decisions and determine whether to make acquisitions, expand, or divest. They also make forward-looking projections for public dissemination such as earnings guidance.


Response: An intangible asset is something of value that is not physical in nature. Classic examples include brands, goodwill, and intellectual property. These things are worth a lot to companies but cannot be held or touched and are sometimes more difficult to value.


What Was the Gentlemen’s Agreement of 1907?

Response: In 1907, U.S. negotiators settled on a gentlemen's agreement that restricted immigration to America by Japanese nationals. In return, President Roosevelt agreed to cancel a San Francisco statute whereby Japanese children were segregated from white students.


What Is the Difference Between Section 1245 Property and Section 1231 Property?

Response: Section 1245 and section 1231 concern the same types of business property. The difference between them is that section 1245 properties have been depreciated or amortized. Once the tax on that depreciation or amortization has been recaptured, the property is considered section 1231 property.


What Is the Difference Between Net Income and Gross Income?

Response: Gross income is the total amount earned. Net income is gross income minus expenses, interest, and taxes. Net income reflects the actual profit of a business or individual.


Is Buying a Put Similar to Short Selling?

Response: Buying puts and short selling are both bearish strategies, but there are some important differences between the two. A put buyer’s maximum loss is limited to the premium paid for the put, while buying puts does not require a margin account and can be done with limited amounts of capital. Short selling, on the other hand, has theoretically unlimited risk and is significantly more expensive because of costs such as stock borrowing charges and margin interest (short selling generally needs a margin account). Short selling is therefore considered to be much riskier than buying puts.


Response: A married put option is a put option purchased at the same time an investor buys the underlying asset. It's also known as a protective put option.


Response: A broker is an intermediary between those who want to make trades and invest and the exchange in which those trades are processed. You need a broker because stock exchanges require that those who execute trades on the exchange be licensed. Another reason is a broker ensures a smooth trading experience between an investor and an exchange and, as is the case with discount brokers, usually won't charge a commission for normal trades.


What Are the Small-Cap Subindexes of the Russell 2000?

Response: There are a number of subindexes within the Russell 2000. The Russell 2000 Value Index tracks the performance of companies with lower price-to-book ratios, which shows a company’s market price relative to its balance sheet. The Russell 2000 Growth Index is a subset of companies with higher price-to-value ratios, or those expected to have higher growth values in the future.


Response: Any financial asset that is being used may be capital. The contents of a bank account, the proceeds of a sale of stock shares, or the proceeds of a bond issue all are examples. The proceeds of a business's current operations go onto its balance sheet as capital.


Response: In folklore, the witching hour is when evil things may be afoot. Derivatives traders have colloquially applied this to the hour of contract expiration, frequently on a Friday at the close of trading. It's triple for the three types of contracts expiring simultaneously: listed index options, single-stock options, and index futures.


Response: As a general rule, cup and handle patterns are bullish price formations. The founder of the term, William O’Neil, identified four primary stages of this technical trading pattern. First, approximately one to three months before the “cup” pattern begins, a security will reach a new high in an uptrend. Second, the security will retrace, dropping no more than 50% of the previous high creating a rounding bottom. Third, the security will rebound to its previous high, but subsequently decline, forming the “handle” part of the formation. Finally, the security breaks out again, surpassing its highs that are equal to the depth of the cup’s low point.


Response: C-suite executives are the executive-level managers within a company. C-suite executives include the chief executive officer (CEO), the chief financial officer (CFO), the chief operating officer (COO), and the chief information officer (CIO).


Can I Use the Available Balance in My Checking Account?

Response: Your available balance is the amount that your bank currently authorizes you to use or withdraw. In these days of electronic transactions, it should be up to the minute.Be careful though. If you used a paper check yesterday, it may not have passed through the bank yet. Or, if you know you'll need $200 tomorrow, and your bank doesn't know that, leave at least $200 in your available balance. Also, keep an eye on any automated payments you have scheduled. If your utility payment is going through tomorrow morning, you want to make sure your balance is adequate.


How Do You Interpret Income Elasticity of Demand?

Response: Income elasticity of demand describes the sensitivity to changes in consumer income relative to the amount of a good that consumers demand. Highly elastic goods will see their quantity demanded change rapidly with income changes, while inelastic goods will see the same quantity demanded even as income changes.


Response: Tulipmania is the story of a major commodity bubble, which took place in the 17th century as Dutch investors began to madly purchase tulips, pushing their prices to unprecedented highs.


Is a Controller the Same As CFO or VP of Finance?

Response: A controller is not the same as a CFO or VP of Finance. A CFO or VP of Finance are often higher-level positions that are on the executive team. Meanwhile, a controller is usually a lower-level position that is less involved in strategic planning or external affairs and mostly involved in internal reporting.


What are some current liabilities listed on a balance sheet?

Response: The most common current liabilities found on the balance sheet include accounts payable; short-term debt such as bank loans or commercial paper issued to fund operations; dividends payable; notes payable—the principal portion of outstanding debt; the current portion of deferred revenue, such as prepayments by customers for work not yet completed or earned; current maturities of long-term debt; interest payable on outstanding debts, including long-term obligations; and income taxes owed within the next year. Sometimes, companies use an account called other current liabilities as a catch-all line item on their balance sheets to include all other liabilities due within a year that are not classified elsewhere.


Why Do Short Sellers Have to Borrow Shares?

Response: Since a company has a limited number of outstanding shares, a short seller must first locate shares. The short seller borrows those shares from an existing long and pays interest to the lender. This process is often facilitated behind the scenes by a broker. If a small amount of shares are available for shorting, then the interest costs to sell short will be higher.


How Are Multiple Regression Models Used in Finance?

Response: Any econometric model that looks at more than one variable may be a multiple. Factor models compare two or more factors to analyze relationships between variables and the resulting performance. The Fama and French Three-Factor Mod is such a model that expands on the capital asset pricing model (CAPM) by adding size risk and value risk factors to the market risk factor in CAPM (which is itself a regression model). By including these two additional factors, the model adjusts for this outperforming tendency, which is thought to make it a better tool for evaluating manager performance.


Why Would a Company Undergo a Reverse Stock Split?

Response: Reverse splits are usually done when the share price falls too low, putting it at risk for delisting from an exchange for not meeting certain minimum price requirements. Having a higher share price can also attract certain investors who would not consider penny stocks for their portfolios.


What Causes a Company to Become Overcapitalized?

Response: A number of factors can lead to a company becoming overcapitalized. A company may become overcapitalized if it buys assets that are priced too high or acquire assets that fit into its operations. Other reasons include poor corporate management, higher-than-expected startup costs (which often appear as assets on the balance sheet), and a change in the business environment. Underutilizing funds can also lead to overcapitalization.


Which Industries Have High Barriers to Entry?

Response: Industries requiring heavy regulation or high upfront capital often have the highest barriers to entry. Telecommunications, transport (i.e. car or airplane), casinos, parcel delivery services, pharmaceutical, electronics, oil and gas, and financial services often all require substantial initial investments. Each of those industries is also heavily regulated or requires substantial oversight from governing bodies.


What Is the Taxpayers Relief Act of 1997?

Response: The Taxpayer Relief Act of 1997 was ratified into law and contained various tax reductions to help stimulate the American economy. Among the items were reduced tax rates and tax credits like the Roth IRA and tax credits for children.


Response: Wharton's MBA program is ranked better than Harvard's by U.S. News & World Report: number three and number five, respectively; however, for undergraduate purposes, Harvard is a better-ranked school that offers a variety of more subjects for students while Wharton is business focused.


Response: The IRS defines a net capital gain as the amount by which net long-term capital gain (long-term capital gains minus long-term capital losses and any unused capital losses carried over from prior years) exceeds net short-term capital loss (short-term capital gain minus short-term capital loss). A net capital gain may be subject to a lower tax rate than the ordinary income tax rate.


Response: The easiest way is to subtract what you've paid in taxes from what you've earned.


Response: Imagine you purchase a new television. In the box with the instructions, you find a document that explains what the manufacturer will do if you experience specific issues within a certain time frame.


Response: Yes, a credit analyst can be a good job if you have an interest in accounting or finance, along with a desire to help companies and consumers make decisions regarding the extension of credit and the reduction of financial risk. According to the U.S. Bureau of Labor Statistics (BLS), the estimated wage range for credit analysts in 2020 was $44,250 to $146,690. The mean annual wage for credit analysts was $86,170.The top-paying industries for credit analysts are monetary authorities (central banks); securities, commodities, and financial investment companies; insurance carriers; and business support firms. The states with the highest employment levels for credit analysts are California, New York, Texas, Florida, and Illinois.


Response: Having a tax lien against you doesn't necessarily hurt your credit. The three major credit bureaus do not include tax liens from consumer credit reports. Be mindful that property tax liens may be public record and widely available to the general population that you owe an outstanding tax bill.


How Do You Record the Allowance for Doubtful Accounts?

Response: You record the allowance for doubtful accounts by debiting the Bad Debt Expense account and crediting the Allowance for Doubtful Accounts account. You'll notice the allowance account has a natural credit balance and will increase when credited.


Response: It depends on the actual KPI being measured. Generally speaking, businesses measure and track KPIs through business analytics software and reporting tools. This includes everything from the collection of data via reliable sources, the safe storage of information, the cleaning of data to standardize its format for analysis, and the actual number crunching. Finally, KPIs are often reported using visualization or reporting software.


How Do You Find Out If Your Information Is on the Dark Web?

Response: Your personal information, such as banking, social media, and email accounts, along with your Social Security number, may be up for sale on the dark web. If you want to see if any of your information is floating around the dark web, try running a scan of the dark web. Alternatively, you can sign up for a dark web monitoring service. These tools warn you whenever they find any of your information.


Do Incumbents Win Re-Election More Often?

Response: Yes, incumbents win re-election more often. In 2023, 94% of incumbents across the nation won re-election in general elections. In fact, the incumbent win rate was at 90% or above in all states except for Colorado, Connecticut, Georgia, Kansas, Minnesota, New Hampshire, and Ohio.


How Can a Company Improve Its Working Capital?

Response: A company can improve its working capital by increasing its current assets. This includes saving cash, building higher inventory reserves, prepaying expenses especially if it results in a cash discount, or closely considering which customers to extend credit to (in an attempt to reduce its bad debt write-offs).A company can also improve working capital by reducing its short-term debts. The company can avoid taking on debt when unnecessary or expensive, and the company can strive to get the best credit terms available. The company can be mindful of spending both externally to vendors and internally with what staff they have on hand.


Have Any of Today’s Big-Name Companies Been Accused of Violating the Sherman Act?

Response: Many household names have been hit with antitrust suits based in part on the Sherman Act. Other than Google, in recent years Microsoft and Apple have both faced complaints, with the former accused of seeking to create a monopoly in Internet browser software and the latter of unethically raising the price of its e-books and, in later years, exploiting the market power of its app store.


Response: Account owners generally must provide a government-issued ID as proof of identity. Some institutions require two forms of ID, such as a driver's license, birth certificate, social security card, or passport. In addition to confirming identity, the address must be confirmed. This can be done with proof of ID or with an accompanying document confirming the address of the client.


How Much Can a Landlord Charge a Renter for Paying Late?

Response: The amount a landlord can charge a renter for paying late depends on the laws in the state. Some states impose no limits other than that the late fee be "reasonable." Others limit it to some percentage of the rent, a dollar figure, or a combination of both.


What U.S. Senator Championed TEFRA in Congress?

Response: Sen. Bob Dole's name is inextricably linked with TEFRA. The Kansas Republican served in the U.S. Senate for 30 years, including three years as Senate Majority Leader.As the chairman of the Senate Finance Committee, Dole was the legislator most responsible for shaping TEFRA and pushing it through the Senate. This outraged many conservatives. Then-freshman House Rep. Newt Gingrich, for instance, called Dole "the tax collector for the welfare state."His association with "the biggest tax increase in U.S. history" would come back to haunt him in 1995, when he ran unsuccessfully for the presidency.


Response: As a baseline, a company's EBIDA must be positive if it hopes to achieve positive cashflow. Even then, EBIDA adds back in depreciation and amortization, so it is possible for a company to have a positive EBIDA and yet still lose money each period. A company should strive to have an EBIDA high enough to sustain company growth as well as tracking what competitive company EBIDA's are to make sure their own is comparable.


Response: Exposure at default is the predicted amount of loss a lender may incur if a debtor defaults on their loan. It is the realized value of what the bank may lose if one of its borrowers is unable to satisfy their debt obligation.


Response: Whether it's worth it to pay a wrap fee depends on how much service you demand from your investment advisor and how often. If you are confident that your money is in good hands and you don't need to revisit your investment decisions regularly, you may not need a wrap fee.The wrap fee generally covers professional advice and research services, trading fees, and related administrative costs. If you aren't using all of those services frequently, you may be better off with the standard pay-as-you-go plan.


Response: California has a statewide sales tax of 7.25%. In addition, some municipalities may impose local sales taxes.


Response: Spurred by the failure of almost 5,000 banks during the Great Depression, the Glass-Steagall Act was passed by the U.S. Congress as part of the Banking Act of 1933. Sponsored by Sen. Carter Glass, a former Treasury secretary, and Rep. Henry Steagall, chair of the House Banking and Currency Committee, it prohibited commercial banks from participating in the investment banking business and vice versa. The rationale was the conflict of interest that arose when banks invested in securities with their own assets, which of course were actually their account holders’ assets. Simply put, the bill’s proponents argued that banks had a fiduciary duty to protect these assets and not to engage in excessively speculative activity.


Response: In finance, beta is a measure of volatility of a security or portfolio compared to the market as a whole. Tracking beta over time can provide investors with a useful risk profile for the asset compared to a major index.


How Do You Calculate the Time Value of Money?

Response: The time value of money takes several things into account when calculating the future value of money, including the present value of money (PV), the number of compounding periods per year (n), the total number of years (t), and the interest rate (i). You can use the following formula to calculate the time value of money: FV = PV x [1 + (i / n)] (n x t).


What is the percentage of small to midsize businesses in the United States?

Response: The most recent U.S. Census data for SMEs found that there were 6.1 million employer firms in the U.S. Firms with fewer than 500 employees made up 99.7% of those businesses. Companies with fewer than 100 employees made up 98.1%.


Is MACD a Leading Indicator or a Lagging Indicator?

Response: MACD is a lagging indicator. After all, all the data used in MACD is based on the historical price action of the stock. Because it is based on historical data, it lags the price. However, some traders use MACD histograms to predict when a change in trend will occur. For these traders, this aspect of MACD might be viewed as a leading indicator of future trend changes.


Response: In general, a target-date fund will have somewhat higher expense ratios compared to a standard mutual fund. This is because the target-date fund, even if it is an index target-date fund, is essentially a fund-of-funds that invests in other mutual funds. Moreover, the fund has to rebalance its portfolio regularly to match the glide path so it is more active than a standard index fund. That said, many target-date index funds available today have low expense ratios of 0.10% or lower.


Response: Oil exporters are free to accept payment in a currency of their choosing. Accepting Chinese currency would be most useful for investment in, and purchases from, China. Chinese capital markets are much smaller and less liquid than those in the U.S., and Chinese currency is not widely accepted outside China.


How Can I Avoid Double Taxation in Two States?

Response: In some cases, individuals may need to file tax returns in multiple states. This can occur if they work or perform services in a different state from where they reside. Luckily, most states have provisions in their tax codes that can help individuals avoid double taxation. For example, some states have forged reciprocity agreements with others, which streamlines tax withholding rules for employers. Others may provide taxpayers with credits for taxes paid out-of-state, reducing their total obligations and avoiding double taxation. How exactly one can avoid double taxation depends on a wide range of factors, including how income is earned and which states are in question.


Response: Stop-limit orders can be set as either day orders—in which case they would expire at the end of the current market session—or good-’til-canceled (GTC) orders, which carry over to future trading sessions. Different trading platforms and brokerages have varying expiries for GTC orders, so check the time period when your GTC order will be valid.


What Is a Downside to the Uniform Gifts to Minors Act?

Response: As the assets in a UGMA account are owned by the minor, this can reduce the amount of financial aid they may receive. If the balance of the UGMA account is too high, it may disqualify them completely from any financial aid. This is true even if they haven't reached the age of majority and can't access the account until a certain date.]


How Often Should You Invest With Dollar-Cost Averaging?

Response: With regard to actually using the strategy, how often you use it may depend on your investment horizon, outlook on the market, and experience with investing. If your outlook is for a market in flux that will eventually rise, then you might try it. If a persistent bear market's at work, then it wouldn't be a smart strategy to use. If you're planning to use it for long-term investing and wonder what interval for buying makes sense, consider applying some of every paycheck to the regular purchases.


What Is the Difference Between a Disbursement and a Payment?

Response: A disbursement is a payment from a fund. The word disbursement implies a payment that has been finalized. That is, it has been properly recorded as a debit on the payer's side and a credit on the payee's side.


Response: Oftentimes, there will be more demand than supply for a new IPO. For this reason, there is no guarantee that all investors interested in an IPO will be able to purchase shares. Those interested in participating in an IPO may be able to do so through their brokerage firm, although access to an IPO can sometimes be limited to a firm’s larger clients. Another option is to invest through a mutual fund or another investment vehicle that focuses on IPOs.


Why Do Interest Rates and Bond Prices Move in Opposite Directions?

Response: As interest rates fall, bond prices rise, and vice versa. New bond issues must also have higher rates to satisfy investor demand for lending the issuer their money. The price of bonds returning less than that rate will fall as there would be very little demand for them as bondholders will look to sell their existing bonds and opt for bonds, most likely newer issues, paying higher yields.


Response: LedgerX was purchased by FTX and rebranded as FTX U.S. Derivatives in 2021. FTX filed for bankruptcy in November 2022, and its founder, Sam Bankman-Fried, stepped down as CEO. After FTX declared bankruptcy in 2022, the exchange was purchased and rebranded back to LedgerX.


Response: Kanban strives to save companies time, money, and other resources by ensuring there is minimal downtime between tasks. In addition, kanban attempts to target bottlenecks before they occur, ensuring that steps can be taken in advance to avoid having work in process sit idly back while problems are fixed.


Response: As financial circumstances or goals change, it may be helpful for an investor to complete an investment objective questionnaire again and reallocate the investments in a portfolio.


Response: In the financial markets, IBES (or I/B/E/S) stands for the Institutional; Brokers' Estimate System, a financial database containing equity analysts' estimates and reports on most publicly-traded companies.


What Responsibilities Did the Seller Have in a DES Transaction?

Response: The seller's responsibilities in a DES transaction included delivering the goods to the named port of destination, covering transportation costs, and assuming risks until the goods arrive at the port. However, the seller was not obligated to unload the goods or clear them through customs at the destination.


What Is the Foreign Earned Income Exclusion for 2022?

Response: For 2022, the foreign earned income exclusion is $112,000. For 2023, the amount is $120,000. Any earned income below these amounts for an individual will not be taxed.


What is an example of counterparty risk?

Response: Counterparty risk refers to the likelihood that a transactor might default on its contractual obligation. In the case of a lender like a bank, one example of counterparty risk would be the borrower’s credit score.


Response: To calculate the churn rate, divide the total number of subscribers lost by the total number of subscribers acquired in the same time period. Then multiply by 100 to find the percentage.You can also calculate the churn rate by dividing the number of subscribers lost in a period by the total number of subscribers at the beginning of that period.


What Are the Benefits of the Modern Portfolio Theory?

Response: The modern portfolio theory can be used to diversify a portfolio in order to get a better return overall without a bigger risk.Another benefit of the modern portfolio theory (and of diversification) is that it can reduce volatility. The best way to do that is to choose assets that have a negative correlation, such as U.S. treasuries and small-cap stocks.Ultimately, the goal of the modern portfolio theory is to create the most efficient portfolio possible.


What Are Some Examples of Revolving Personal Credit?

Response: Revolving credit accounts are quite common. Some examples include credit cards, personal lines of credit, or home equity lines of credit.


Response: It is not possible to fully prevent committing a Type II error; but, the risk can be minimized by increasing the sample size. However, doing so will also increase the risk of committing a Type I error instead.


Response: "Severance of unity" is one of the items that the owner of a landlocked property must prove when trying to obtain an easement by necessity. It proves that the initial owner of the land subdivided the property and part of the division was transferred to the claimant.


Response: The M2 was $20.8 trillion in March 2024. That's how much cash Americans had in their wallets, checking accounts, and short-term savings accounts.


What Has Been Causing the Decline in the Japanese Yen?

Response: Currency traders have been betting the Bank of Japan will keep its policy rate near zero despite rising inflation. The BoJ had acquired more than half of Japan's government bonds outstanding by June 2022 in an effort to cap long-term interest rates in order to promote growth.


Response: It depends on the car. For the most part, vehicles in good condition may be desired in the open market, prompting a quick sale. There's a few things to keep in mind, though.First, the price you offer for your may impacts the liquidity of it. You will be more likely to sell your vehicle for less and may find it difficult to find buyers for your top dollar quote. Second, the condition of the car matters. Better quality assets will usually be more liquid.Last, a car's liquidity depends on the broad car market. How are economic conditions and interest rates? What is the demand for your specific make, model, and year? Is your car rare, expensive, or custom (in which sellers may be disinterested)? There are many factors to contribute, although most cars can generally be sold quickly.


What Is the Difference Between Default and Delinquency?

Response: Debt becomes delinquent when you have failed to make a single on-time payment. Default occurs after a series of delinquent payments, the number of which can vary by type of loan and lender. Both are best avoided, but default has worse consequences for your credit history.


What Happens If I Redeem a CD Before It Matures?

Response: Typically, early withdrawal results in a financial penalty of months of interest already earned. The earned interest is usually inaccessible to the account holder until the CD matures. Some issuers do offer a penalty-free CD that allows for the early withdrawal of funds. However, the interest rate is likely to be lower than CDs that do not provide this option.


What Is the Ultimate Objective of Strategic Financial Management?

Response: The goal of strategic financial management is to ensure that long-term goals are properly planned for and ultimately met.


Response: When a company acquires a vehicle to add to its fleet, the purchase is often capitalized and treated as CapEx. The cost of the vehicle is depreciated over its useful life, and the acquisition is initially recorded on the company's balance sheet.This is treated differently than OpEx, such as the cost to fill up the vehicle's gas tank. The tank of gas has a much shorter useful life to the company, so it is expensed immediately and treated as OpEx.


Why Is the Russell 2000 Annual Reconstitution Important?

Response: The Russell 2000 announces changes to the small-cap index between May and June of each year. Because it is closely followed by mutual funds managers and individual investors, speculation as to which companies will be added can cause a jolt in short-term demand.


What Purpose Does a Custodian Financial Institution Serve?

Response: A custodian financial institution keeps the securities owned by individuals and organizations safe. This serves an important purpose since financial securities must be cleared and settled properly, with various regulatory and accounting procedures met. These are often far too complex or time consuming for investors or traders.


Response: An ad valorem tax is levied on the assessed value of a piece of property, usually real estate or a vehicle. The phrase "ad valorem" means "according to value," so these tax burdens are distributed among the community according to the value of each taxpayer's property. These taxes are a source of revenue for local governments and school districts.


What Are the 3 Components of a Neural Network?

Response: All neural networks have three main components. First, the input is the data entered into the network that is to be analyzed. Second, the processing layer utilizes the data (and prior knowledge of similar data sets) to formulate an expected outcome. That outcome is the third component, and this third component is the desired end product from the analysis.


Do non-cash contributions require an appraisal to prove their worth?

Response: Only in certain circumstances. Art pieces valued at $20,000 or more need a written appraisal from a qualified appraiser. A household good that is not in good or better condition must have an appraisal. Jewelry and gems almost always require an appraisal.On the other hand, all publicly traded securities and intellectual property are among the items that do not need an appraisal.


Are Contributions to a TFSA Tax Deductible?

Response: No. You make contributions with money that's already been taxed. Therefore, they aren't deductible up front and can't reduce your taxable income. However, with few exceptions, all withdrawals from a TFSA are completely tax free.


Response: Fair lending laws prohibit lenders from discriminating based on specific protected classes during any aspect of a credit transaction. Several statutes comprise federal fair lending laws and regulations, including the:Fair Housing Act of 1968Equal Credit Opportunity Act of 1974Home Mortgage Disclosure Act of 1975Community Reinvestment Act of 1977


What Are Some Potential Drawbacks of Horizontal Mergers?

Response: Horizontal mergers can lead to reduced competition, which may result in higher prices, decreased innovation, and fewer choices for consumers. Additionally, integrating two companies with different corporate cultures and operations can pose social challenges, and there may be regulatory scrutiny to ensure the merger does not harm competition.


What are the Benefits of Hypothesis Testing?

Response: Hypothesis testing helps assess the accuracy of new ideas or theories by testing them against data. This allows researchers to determine whether the evidence supports their hypothesis, helping to avoid false claims and conclusions. Hypothesis testing also provides a framework for decision-making based on data rather than personal opinions or biases. By relying on statistical analysis, hypothesis testing helps to reduce the effects of chance and confounding variables, providing a robust framework for making informed conclusions.


Response: Business ethics guide executives, managers, and employees in their daily actions and decision-making. For example, consider a company that has decided to dump chemical waste that it cannot afford to dispose of properly on a vacant lot it has purchased in the local community. This action has legal, environmental, and social repercussions that can damage a company beyond repair.


Is Stockholders’ Equity Equal to Cash on Hand?

Response: No. Since equity accounts for total assets and total liabilities, cash and cash equivalents would only represent a small piece of a company's financial picture.


Response: There are three major credit bureaus in the United States: Equifax, Experian, and TransUnion. They each calculate your FICO score in different ways using the same information. Credit bureaus collect, analyze, and disburse information about consumers in the credit markets.


Response: All risk is a type of insurance product that requires a risk to be explicitly stated for it to not be covered. For example, if the contract does not state "tree damage" as an omitting risk, then if a tree were to fall on the insured property under an all risk policy, since the tree was not explicitly mentioned, the damage would be covered.


Are a Company's Earnings the Same As Its Income?

Response: A company's earnings are its profit in a given time period. This is the same as the net income. Earnings are different, however, than gross income, which is income before taxes and other expenses are deducted.


Response: As college students, undergraduate majors in finance will learn the ins and outs. A masters degree in finance will hone those skills and expand your knowledge base. An MBA will also provide some basics for corporate finance and similar topics. For those who already have graduated without a finance degree, the chartered financial analyst (CFA) self-study program is a rigorous series of three difficult exams that culminates in a globally-recognized credential in finance. Other, more specific industry standards also exist such as the certified financial planner (CFP).


Response: Balloon loans are popular in the construction industry and for home flippers. Contractors or real estate investors use the low initial payments to complete work on a project, hoping to sell it before the balloon payment comes due.


How Are Statistics Used in Economics and Finance?

Response: Economists collect and look at all sorts of data ranging from consumer spending to housing starts to inflation to GDP growth. In finance, analysts and investors collect data about companies, industries, sentiment, and market data on price and volume. The use of inferential statistics in these fields is known as econometrics. Several important financial models, from CAPM to Modern Portfolio Theory (MPT) and the Black-Scholes options pricing model, rely on statistical inference.


Can Fund Flow Predict Market Behavior Reliably?

Response: Not necessarily, although in past years apparently it did a pretty good job. Morningstar has found that net outflows happen even when a market is strong. If fund flow were an accurate indicator, both flow and behavior would probably match more often than they do.


What Are the Two Main Types of Sensitivity Analysis?

Response: The two main types of sensitivity analysis are local sensitivity analysis and global sensitivity analysis. Local sensitivity analysis assesses the effect of a single parameter at a time while holding all other parameters constant, while global sensitivity analysis is a more broad analysis used in more complex modeling scenarios such as Monte Carlo techniques.


What Are the Best Assets to Trade with the Three White Soldiers Chart Pattern?

Response: The three white soldiers chart pattern is a versatile technical indicator that could be applied across various asset classes. However, its effectiveness may vary depending on the asset's liquidity, volatility and market conditions. Some asset classes where this pattern is commonly used are stocks, forex, commodities, ETFs, futures and options.


Is IRS Schedule K-1 Income Considered Earned Income?

Response: It varies, depending on the individual's participation and status. For trust and estate beneficiaries, limited partners, and passive investors, Schedule K-1 income is more akin to unearned income. For general partners and active owners in a business or pass-through business entity, the income can be considered earned income, and they may owe self-employment tax on it.


How Did MiFID II Affect Investment Banks?

Response: For banks that provide asset management or investment services, MiFID II requires financial instruments to be traded only in multilateral and regulated trading platforms, or those that adhere to the transparency requirements of OTC trading. These rules are intended to protect investors and eliminate dark trading of securities.


Response: Public companies are required to perform financial accounting as part of the preparation of their financial statement reporting. Small or private companies may also use financial accounting, but they often operate with different reporting requirements. Financial statements generated through financial accounting are used by many parties outside of a company, including lenders, government agencies, auditors, insurance agencies, and investors.


What Is the Difference Between a Bank Draft and a Certified Check?

Response: With a bank draft, the funds are withdrawn from your bank account and then the check is made out from the bank, which guarantees it. Your funds are placed into the bank's reserve account. With a certified check, the money is also guaranteed by the bank, but your funds are not withdrawn until the check is cashed. Instead, they are placed on hold.


What Are Permanent Open Market Operations?

Response: The term "permanent open market operations" refers to outright purchases or sales of securities by a central bank (that won't be reversed in the short-term) to adjust the money supply. Permanent OMOs are the opposite of temporary open market operations, which involve repurchase and reverse repurchase agreements that are designed to temporarily add reserves to the banking system or drain reserves from it.


Response: The key metrics for investing with the magic formula method are the earnings yield and return on capital. Earnings yield is determined by dividing each company's earnings before interest and taxes by the total value of the enterprise. Return on capital is determined by dividing the company's EBIT by the sum of its net fixed assets and working capital.


Response: “Safe harbor” rules allow you to not pay a penalty or to pay a reduced penalty if you meet certain conditions. An underpayment penalty with the IRS can be avoided if you owe less than $1,000 or pay more than 90% of your tax obligation for the year.


What Is the Difference Between DDP and DDU?

Response: In the world of shipping, delivered duty unpaid (DDU) simply means that it's the customer's responsibility to pay for any of the destination country's customs charges, duties, or taxes. These must all be paid in order for customs to release the shipment after it arrives.On the other hand, delivered duty paid (DDP) means it's the shipper's responsibility to pay any of the customs charges, duties, and/or taxes required to send the product to the destination country.


What is universal life (UL) insurance, and how does it work?

Response: UL insurance policies are a form of permanent life insurance with flexible premiums. Unlike term life, UL policies can accumulate interest-bearing funds like a savings account. Also, policyholders can adjust their premiums and possibly their death benefit, and those paying extra toward their premium receive interest on that excess.


Response: Reasonable travel expenses, from the viewpoint of an employer or the IRS, would include transportation to and from the business destination, accommodation costs, and meal costs. Certainly, business supplies and equipment necessary to do the job away from home are reasonable. Taxis or Ubers taken during the business trip are reasonable.Unreasonable is a judgment call. The boss or the IRS might well frown upon a bill for a hotel suite instead of a room, or a sports car rental instead of a sedan.


Response: Late-stage financing has become more popular because institutional investors prefer to invest in less-risky ventures, as opposed to early-stage companies where the risk of failure is higher.


Response: A rolling quorum is one in which all required members need not be at the same location at the same time to meet the requirements for the quorum. For example, some members may be in person, while some may be on the phone/conference call.


Do Investors Have to Hold Gilts to Maturity?

Response: No, investors do not have to hold a Gilt until it reaches its maturity date. They can sell Gilts to other investors on the secondary market.


Response: According to some, Moore's Law will end sometime in the 2020s. If components continue to shrink, physical limits will be reached during this decade because it's unlikely that transistors smaller than atoms can be printed. There is only 1.5nm of space left to print on, depending on the element.


Response: Yes, Tencent is an H-share company listed on the Hong Kong Stock Exchange available for foreign investors. Tencent is also listed on the Nasdaq as an American depository receipt (ADR).


Response: The Zacks Mutual Fund Rank is a rating that is applied to mutual funds, in the same way that Zacks Ranks are assigned to individual stocks. Each quarter, the Zacks Quantitative Research Department calculates a rating for 19,000 different mutual funds, based on the average Zacks Rank of the stocks held by each fund, as well as other quantitative factors.


What Are Some Features of Retail Banking?

Response: Retail banking is intended to help consumers manage their money by giving them access to basic banking services, a source of credit, and financial advice. The general public can access a variety of services through a retail bank, including checking and savings accounts, mortgages, credit cards, foreign currency and remittance services, and automobile financing.


Response: The currency symbol ₹ is used to represent the Indian rupee (INR). It was selected through a public contest and approved by the government of India in 2010.


Do Wirehouses Still Use Telephone and Telegraph Wires?

Response: No. Wirehouses don't use telephone and telegraph wires any longer. They use the internet, just like the rest of us. They don't even have those noisy machines that pumped out streams of stock prices printed on ticker tape and ready-made for tossing out the windows during parades. That was a telegraph technology, too.


Response: Once a ULIP has matured, the policy is paid out to the policyholder. The total amount paid out is the sum of the amount insured plus the amount invested. Note that should the policyholder have passed away, a nominee may be elected to receive the distribution.


What Are the 4 Main Types of Business Risk?

Response: The four main types of risk that businesses encounter are strategic, compliance (regulatory), operational, and reputational risk. These risks can be caused by factors that are both external and internal to the company.


What Is the Difference Between FDI and FII?

Response: "FDI" refers to "foreign direct investment," which is the investment made into a foreign country, usually an investment in a foreign company. "FII" refers to "foreign institutional investor," which is a person or institution that invests in a foreign market, usually the stock market of another country.


Response: Gap insurance isn't mandatory, but it might be required by your financing agreement. It's a good idea to carefully review the terms of your car loan to see if you need gap insurance. If you're leasing a car, you may be required to buy gap insurance.


What Are the Main Causes of Unemployment?

Response: There are many reasons for unemployment. These include recessions, depressions, technological improvements, job outsourcing, and voluntarily leaving one job to find another.


Response: The countries of Northern Africa typically include Algeria, Egypt, Libya, Morocco, Sudan, Tunisia, and Western Sahara. This term may also be extended to include certain East African countries such as Djibouti and Somalia.


What Does It Mean to Assign Without Recourse?

Response: Loans are often sold or transferred among lenders. When a loan is assigned to a new lender, neither the borrower nor the new loan holder can hold the first loan originator liable for any loan-related issues.


When Was a National Currency Established in the United States?

Response: On February 25, 1863, President Lincoln signed The National Currency Act into law which established the Office of the Comptroller of the Currency (OCC), charged with responsibility for organizing and administering a system of nationally chartered banks and a uniform national currency.


Which Indicators Work Best with Bollinger Bands®?

Response: Many technical indicators work best in conjunction with other ones. Bollinger Bands® are often used along with the relative strength indicator (RSI) as well as the BandWidth indicator, which is the measure of the width of the bands relative to the middle band. Traders use BandWidth to find Bollinger Squeezes.


Will Forbearance Affect Your Credit Rating?

Response: Forbearance doesn't adversely affect your credit rating. However, missing payments before contacting the lender and setting up the forbearance terms will most likely have a negative impact. Forbearance assistance offered to mortgage borrowers affected by COVID-19 is reported by lenders to credit bureaus as required by the CARES Act. However, in certain situations, lenders are required to report your mortgage account as "current," thus protecting your credit score.


Response: Intrapreneurs are employees of a company who are assigned to work on a special idea or project. They are given the time and freedom to develop the project as an entrepreneur would.


Can you have a HELOC and a home equity loan simultaneously?

Response: Yes. You can have both a HELOC and a home equity loan at the same time, provided you have enough equity in your home, as well as the income and credit to get approved for both.


Response: While many customers will track a FedEx (FDX) package with a tracking number, a reference number provides an alternative way for customers to locate their packages. Examples of a FedEx reference number include a purchase order (PO) number, customer account number, invoice number, and bill of lading number. Having access to one or more of these numbers helps customers track the status of their shipment and verify delivery.


Response: The Market Access Rule is Rule 15c3-5, which requires institutions with market access or that provide market access to clients to "appropriately control the risks associated with market access so as not to jeopardize their own financial condition, that of other market participants, the integrity of trading on the securities markets, and the stability of the financial system."


What's the Benefit of the Comprehensive Income Statement?

Response: It provides a comprehensive view for company management and investors of a company's profitability picture. It's also a way for a company to record more than simply net income. The statement shows net income as well as other comprehensive income.


Response: Income earned on an investment is any gains made on a principal amount. The gains become income when they are realized—sold for a profit or withdrawn from the account they are in.


What Is an Indefinite Delivery, Indefinite Quantity Contract?

Response: The term indefinite delivery, indefinite quantity contract refers to a type of contract for goods and services that expires within a certain time frame. These types of contracts streamline the speed and delivery when the quantity of services can't be determined.


Response: The HMRC was established by an act of Parliament in 2005.


Response: A quanto option is an options contract that is denominated in a different currency than the underlying asset. When the option matures, any payoff is received in foreign currency at a fixed exchange rate. This is useful for traders who wish to gain exposure to foreign options markets but who do not want to expose themselves to exchange rate risk.


Where Is the Best Place to Buy Japanese Yen?

Response: Some of the best places to buy Japanese yen are at a large branch of a national bank such as Chase, Bank of America, or Wells Fargo. You can also buy foreign currency including JPY at airports, although exchange outlets there are likely to feature wider buy/sell spreads as the price of the convenient location.


What Is the Difference Between an LLC and a Limited Partnership?

Response: Both LLCs and LPs offer flexibility in how they structure responsibilities, share profits, and pay taxes.An LP allows certain investors (limited partners) to invest without having a management role or any personal liability, while the general partners carry all the liability.With an LLC, the owners can shield themselves from personal liability, but all generally have management roles. An LP must have at least one limited partner.LLCs have greater flexibility for tax reporting. Often, the general partner of an LP will be structured as an LLC to help provide personal liability protection, as LLC managers are typically not held personally responsible for the businesses’ liabilities.


Response: While working as a Stanford associate professor, Clark and some of his graduate students created the Geometry Engine computer chip, which instantly processed 3-D images.


Response: A family office is a private wealth management firm established by an ultra-high-net-worth family that provides that family with a selection of personalized services that include investment management, financial planning, estate and tax planning, philanthropic investing, concierge services, and more.


Response: Ordinary losses are fully deductible in the year losses were incurred and cannot be carried forward to subsequent years. Capital losses exceeding the maximum deductible amount can be carried forward into future years.


What Is the Difference Between Operating Costs and Startup Costs?

Response: Operating costs are the expenses a business incurs in its normal day-to-day operations. Startup costs, on the other hand, are expenses a startup must pay as part of the process of starting its new business. Even before a business opens its doors for the first time or begins production of a new product, it will have to spend money just to get started.For example, the business may need to spend money on research and development, equipment purchases, a lease on office space, and employee wages. A startup often pays for these costs through business loans or money from private investors. This contrasts with operating costs, which are paid for through revenue generated from sales.


Can You Go to Jail for Not Paying a Loan?

Response: No, you cannot go to jail for not paying a loan. No type of consumer debt that is unpaid entails an individual going to jail. Not paying a loan will impact your credit score and will be a part of your credit history, hurting your chances of obtaining loans or loans with good rates in the future, but no type of unpaid debt results in the borrower receiving jail time.


Response: RWA stands for "risk-weighted asset" and it is used in the risk-adjusted capital ratio, which determines a financial institution's ability to continue operating in a financial downturn. The ratio is calculated by dividing a firm's total adjusted capital by its risk-weighted assets (RWA).


Response: Digital asset management, or DAM, is a process of storing media assets in a central repository where they can be accessed as necessary by all members of an organization. This is usually used for large audio or video files that need to be worked on by many teams of employees at once.


Response: A base year is determined depending on the analysis being performed. For example, a company established in 2021 could use that year to measure sales growth moving forward.


Response: While there is no record of President Reagan using the phrase "trickle-down," his economic philosophy was closely aligned with the idea that business-friendly policies would ultimately benefit the entire economy. By reducing taxes on the wealthy, Reagan hoped the benefits would "trickle down" in the form of increased employment and business activity.


How Are Withdrawals from Qualified Retirement Plans Taxed?

Response: Withdrawals, or distributions, from qualified retirement plans must be included in the taxpayer’s income for that year and are taxed at the same rate as their ordinary income, such as a salary. Roth-type accounts, however, are eligible for tax-free withdrawals, in part because the income that was used to fund them has already been taxed.


Response: Shopping for the best CD rate takes a lot of research but Investopedia has done the hard work for you and maintains lists of the best rates available no matter what length of time you're looking for:Best CD RatesBest 3-Month CD RatesBest 6-Month CD RatesBest 1-Year CD RatesBest 2-Year CD RatesBest 3- Year CD RatesBest 4-Year CD RatesBest 5-Year CD RatesBest 10-Year CD RatesBest Jumbo CD RatesBest Bank CD Rates


Response: They are a part of a currency pair's exchange rate market quote. Pips represent the change in the quote and value of a position in the market you may have taken. Say, hypothetically, you bought a currency pair for 1.1356 and sold it for 1.1360. You made four pips on your trade. You'd have to then calculate the value of a single pip and multiply that by your lot size for the dollar value of your profit.


Response: The velocity of money in the United States fell sharply during the first and second quarters of 2020, as calculated by the St. Louis Federal Reserve Bank. While there is no definitive explanation, the fall is likely due to the diminished activity incurred during the COVID-19 pandemic, as well as an increase in consumer savings due to economic uncertainty.


What Is the World's Largest Asset Manager?

Response: The largest private asset manager is BlackRock, which holds about $10 trillion in assets under management as of 2022. Note that most of these assets are held in the name of BlackRock's clients; they are not owned by BlackRock itself.


Response: Generally, a 401(k) is better because it has higher contribution limits, no income qualifications like a Roth IRA, and most employers offer a matching contribution. However, 401(k)s are only offered by employers and not all offer them. If you don't have access to a 401(k), then an IRA is a great alternative. Keep in mind that you can contribute to both a 401(k) and an IRA.


Response: Building guanxi is usually a long-term process. Several techniques can help do so. You can begin by gaining knowledge about China's history and culture. Seeking formal introductions to individuals with whom you want to do business is also helpful to start relationships, especially where you make a conscious effort to create trust and social contact. Finally, gifts and entertaining, especially dinners, are traditional Chinese methods of building social capital.


Response: Lenders require that borrowers pay back the principal amount of debt, as well as interest in addition to that amount. The interest rate, or yield, demanded by creditors is the cost of debt—it is demanded to account for the time value of money (TVM), inflation, and the risk that the loan will not be repaid. It also involves the opportunity costs associated with the money used for the loan not being put to use elsewhere.


How Is the Interest Rate Differential Used in the Housing Market?

Response: It's used in the housing market to illustrate the difference in rating between the stated interest rate and a bank's posted rate when it comes to prepayment dates for mortgages.


What Is the Benefit of a Buy and Sell Agreement?

Response: A buy and sell agreement assures a smooth transition of ownership and business continuity in the event of a departure of a partner or large equity owner. The agreement is a legally-binding contract that establishes how the departing owners' shares will be obtained by the remaining partners. Without such an agreement, there can be legal battles and contestation. For instance, if a partner dies without an agreement, their shares may be passed automatically to their spouse, who may decide to keep them. Or, the spouse may want to sell them, but the remaining partners do not have the funds available to buy the shares.


Why Is Crowding Out Important to Understand?

Response: It's important to understand because it contradicts the well-understood theory that government spending boosts private sector spending and supports a vibrant economy.


Response: IPOs tend to garner a lot of media attention, some of which is deliberately cultivated by the company going public. Generally speaking, IPOs are popular among investors because they tend to produce volatile price movements on the day of the IPO and shortly thereafter. This can occasionally produce large gains, although it can also produce large losses. Ultimately, investors should judge each IPO according to the prospectus of the company going public as well as their financial circumstances and risk tolerance.


Response: A dividend-paying stock generally pays 2% to 5% annually, whether in cash or shares. When you look at a stock listing online, check the “dividend yield” line to determine what the company is paying out.


Response: The derisive acronym "PIIGS" stands for five countries at the periphery of the Eurozone economy: Portugal, Ireland, Italy, Greece, and Spain.


What Is the Law of Diminishing Marginal Utility?

Response: The law of diminishing marginal utility is a law of economics that states that as your consumption increases, the satisfaction you derive from each individual unit decreases. This is why consumers are willing to pay the most for the first unit of something they buy, but after a point, they often will not buy additional units without a decrease in price.


What Does the Government Accountability Office Do?

Response: The Government Accountability Office is the audit agency of the U.S. government.It evaluates the effectiveness of U.S. programs and proposed programs. For example, one of its ongoing reviews examined the effectiveness of $4.8 trillion in federal spending related to the COVID-19 pandemic and made recommendations for changes to prevent misuse of funds, fraud, and errors in relief payments. Interestingly, the agency's own reporting indicates that only 33 of the proposed 209 recommendations for improvement were "fully adopted" as of the end of October 2021.


What Does Year to Date Mean on a Pay Stub?

Response: On a pay stub, your YTD figure shows the total of your wages or earnings from the start of the current calendar year up to and including the most recent pay period. Most pay stubs show a running total of YTD earnings that includes gross wages, net pay, or both. They may also provide a YTD tally of your FICA taxes, income taxes, and other deductions.


How Much Can You Contribute to a Defined Contribution Plan?

Response: Plan participants under 50 can contribute up to $22,500 a year to a 401(k) in 2023 and up to $7,500 in catch-up contributions if they are over age 50.


Response: The benefits of FIIs to countries are that FIIs bring in foreign capital, which boosts the economy of a nation. This spurs growth and shores up foreign reserves. It also helps the FIIs as it allows for greater diversity and exposure to foreign markets.


Response: Yes, MIGA is part of World Bank Group. World Bank Group's stated mission is to end extreme poverty and promote prosperity; the four other institutions that comprise World Bank Group are the International Bank for Reconstruction and Development, The International Development Association, the International Finance Corporation, and the International Centre for Settlement of Investment Disputes.


What Is the Difference Between an ADR and a GDR?

Response: ADRs provide a listing to foreign shares in one market. U.S. Global Depositary Receipts (GDRs), on the other hand, give access to two or more markets (most frequently the U.S. and Euro markets) with one fungible security. GDRs are most commonly used when the issuer raises capital in the local market as well as in the international and U.S. markets. This can be done either through private placement or public offerings.


Response: Today, many swaps in the U.S. are regulated by the Commodities Futures Trading Commission (CFTC) and sometimes the SEC, even though they usually trade over-the-counter (OTC). Due to the Wall Street reforms in the 2010 Dodd-Frank Act, swaps in the U.S. must use a Swap Execution Facility (SEF), which is an electronic platform that allows participants to buy and sell swaps pursuant to regulation. The regulation of swaps is aimed at ensuring that these financial instruments are traded in a fair and transparent manner, and to reduce the risk of systemic financial failure (since swaps were blamed, in part, for the 2008 financial crisis). The specific regulations that apply to swaps internationally vary by jurisdiction.


What's the Relationship Between GDP and Aggregate Demand?

Response: GDP (gross domestic product) measures the size of an economy based on the monetary value of all finished goods and services made within a country during a specified period. As such, GDP is the aggregate supply. Aggregate demand represents the total demand for these goods and services at any given price level during the specified period. Aggregate demand eventually equals gross domestic product (GDP) because the two metrics are calculated in the same way. As a result, aggregate demand and GDP increase or decrease together.


Response: The efficient markets theory—also known as the efficient markets hypothesis—maintains that all the information that is known about a particular stock at a given time is already reflected in its share price or will be in short order. For that reason, adherents of the theory say it is all but impossible for any investor to consistently outperform the market. Efficient markets theory is often cited as a major argument for investing through index funds.As Princeton economist Burton C. Malkiel, author of the influential book A Random Walk Down Wall Street wrote in a 2003 paper, "Many of us economists who believe in efficiency do so because we view markets as amazingly successful devices for reflecting new information rapidly and, for the most part, accurately."


Why Does the Federal Reserve Conduct Open Market Operations?

Response: Open market operations are used by the Federal Reserve to move the federal funds rate and influence other interest rates. It does this to stimulate or slow down the economy. The Fed can increase the money supply and lower the fed funds rate by purchasing, usually, Treasury securities. Similarly, it can raise the fed funds rate by selling securities from its balance sheet. This takes money out of circulation and pressures interest rates to rise.


Response: To calculate a trade deficit, subtract the total value of exports from the total value of imports for a specific period. The resulting figure represents the net trade balance, with a negative value indicating a trade deficit.


What Is an Endorsement with Respect to Insurance?

Response: In insurance, an endorsement is also known as a rider and is an amendment that adds to or modifies the original policy.


Response: Asset backing refers to the total value of a company’s shares in relation to its assets. Specifically, it refers to the total value of all the assets that a company has, divided by the number of outstanding shares that the company has issued.In terms of investments, asset backing refers to a security with value deriving from a single asset or a pool of assets; these holdings act as collateral for the security—“backing” it, in effect.


What Is William Cavanaugh III Best Known for?

Response: Although not necessarily a household name, William Cavanaugh III is known in the energy industry. He worked with several energy companies, including Carolina Power & Light Company. The company later became known as Progress Energy and was acquired by Duke Energy in July 2012. Cavanaugh protested the deregulation of the energy industry, helping his company avoid many problems that other, larger energy companies faced.


Do I Need to Keep Physical Copies of Documents, or Are Digital Copies Acceptable?

Response: It is generally acceptable to maintain digital copies of documents for tax purposes. However, it is important to be able to prove the authenticity of these digital records, especially in the context of a potential audit. Also, ensure that digital copies are stored securely, remain unaltered, and can be readily accessed when needed.


What Is the Purpose of a Progressive Tax?

Response: Progressive taxes exist so that the burden of paying for government services, oversight, and infrastructure doesn't fall disproportionately on those earning lower incomes. With a progressive tax system, those who earn less are taxed less. Those who earn more are taxed more. Since the top earners are taxed more and on larger sums of money, a progressive tax also increases the amount of tax revenue coming in.


Response: The contribution margin can be stated on a gross or per-unit basis. It represents the incremental money generated for each product/unit sold after deducting the variable portion of the firm's costs. Basically, it shows the portion of sales that helps to cover the company's fixed costs. Any remaining revenue left after covering fixed costs is the profit generated. So, for a business to be profitable, the contribution margin must exceed total fixed costs.


Response: You get a refund if you overpaid your taxes the year before. This can happen if your employer withholds too much from your paychecks (based on the information you provided on your W-4). If you’re self-employed, you may get a refund if you overpaid your estimated quarterly taxes. Refundable tax credits, such as the EITC, can also lead to refunds.


Response: Skewness is commonly found when analyzing data sets, as there are situations where skewness is simply a component of the data set being analyzed. For example, consider the average human lifespan. As most people tend to die after reaching an elderly age, fewer individuals pass away when they are younger. In this case, skewness is expected and normal.


What Are the Two Types of Stratified Random Sampling?

Response: There are two main types of stratified random sampling: proportionate and disproportionate sampling. Proportionate sampling takes each stratum in the sample as proportionate to the population size of the stratum. In disproportionate sampling, the analyst will over- or under-sample certain strata based on the research question or study design being employed.


What Are the Seven Characteristics of Entrepreneurs?

Response: Seven primary characteristics among entrepreneurs include versatility, resilience, flexibility, money-savviness, business smarts, focus, and having strong communication skills.


How Do You Determine a Head and Shoulders Stock Pattern?

Response: A head and shoulders pattern can be determined if prices fall below the neckline after the third peak. This is considered confirmation that a reversal is in progress, and most analysts will predict further declines.


Response: A widow maker stock is a stock that has high risk and high returns. The stock would have the potential of causing a large loss to an investor. Typically, a widow maker would not refer to a specific stock but rather a type of trade that could result in a loss.


What Is a Guaranteed Lifetime Withdrawal Benefit (GLWB)?

Response: A guaranteed lifetime withdrawal benefit (GLWB) is a rider that you may be able to add to your variable annuity contract. It guarantees a minimum payout level, even if market losses reduce the cash value of the contract. Most riders also allow you to make withdrawals from your cash value as needed.


What Is the Difference Between the Bid and the Ask Price?

Response: A bid price is the most a buyer will pay. An ask price is the least the seller will accept for the stock. The difference is known as the “spread.”Bonds with high levels of liquidity, such as Treasurys, generally have spreads of a few pennies between the bid and the ask price in a full quote. The spreads on corporate bonds with lower levels of liquidity can exceed $1. A full quote on an illiquid corporate bond could list a last trade of $98, with a bid of $97 and an ask price of $99.


Response: It depends on the industry in which the company operates. Anything above 1.0 means the company has more debt than earnings before accounting for income tax, depreciation, and amortization. Some industries might require more debt, while others might not. Before considering this ratio, it helps to determine the industry's average.


Response: There is no set amount for bonuses in the United States, as they can vary widely depending on the industry, the size of the company, and the employee's job title and performance. Bonuses can range from a few hundred dollars to several thousand dollars or more, depending on the circumstances.In some cases, bonuses are a fixed amount that is determined in advance, such as a signing bonus for a new hire or a retention bonus to encourage an employee to stay with a company. In other cases, bonuses are based on performance and would depend on an employee's individual contributions or the success of the company.


Response: The Nasdaq is a U.S. stock exchange based in New York City. It officially opened for business in February 1971. There are more than 5,000 companies that trade on the exchange, including domestic and international firms. It was the first automated exchange in the world.


What Do You Do With a Custodial Account When Your Child Turns 18?

Response: The account is transferred to the child once they reach the age of majority, which is either 18 or 21, depending on the state.


What Are the Advantages of a Closed-End Fund?

Response: Shares of a closed-end fund trade throughout the day on a stock exchange, and that market-driven price may differ from its NAV. This can provide opportunities for profiting from higher or lower values.


Response: As a rule of thumb, a VIF of three or below is not a cause for concern. As VIF increases, the less reliable your regression results are going to be.


Response: To qualify for life insurance, you need to submit an application. But life insurance is available to almost anyone. However, the cost or premium level can vary greatly based on your age, health, and lifestyle. Some types of life insurance don't require medical information but generally have much higher premiums and involve an initial waiting period before the death benefit is available.


Response: Inventory financing allows companies to borrow to pay for products that they plan to sell at a later date. This inventory is used as collateral for short-term loans or lines of credit. The costs associated with this type of financing include interest rates, origination fees, and prepayment fees if the loan is paid off earlier than expected. Other charges include late payment charges and late payment fees, if any.


Response: Real-time quotes for stocks are the same as other quotes but are usually updated in "real-time" by sophisticated trading platforms. They are most commonly used by day traders who engage in high-frequency trading (HFT). However, some criticize this style of trading because it will favor companies and individuals who have the most powerful tech.


Response: Yes, a morning star pattern is bullish. It signals a weakness in a downtrend that may result in a trend reversal, which would be the start of an increase in an asset's price.


What Leadership Positions Did James M. Buchanan Jr. Hold?

Response: Buchanan served as a member of the Board of Advisors of the Independent Institute, a member and former president of the Mont Pelerin Society, and a Distinguished Senior Fellow of the Cato Institute.


Why Are Companies Divesting From Israel?

Response: In 2002, archbishop Desmond Tutu launched a campaign calling on international investors to divest from Israel over the country's alleged colonization of the West Bank and other occupied Palestinian territories. Several high profile institutions, including universities and church groups, have reduced or eliminated investments in Israeli companies and businesses.


Response: Dividend-paying companies have several options when it comes to the type of dividend they offer shareholders. They can pay dividends in cash, which is the most common type, or they can offer stock dividends, give shareholders additional (existing) shares in the company. Other, less common types of dividends are the scrip dividend, property dividend, and special dividend.


How Much Key Person Insurance Do You Need?

Response: The amount of key person insurance needed for a business will vary depending on the business and the type of role the key person plays. Purchasing key person insurance that is eight to 10 times the key person's salary is often recommended or the monetary value of the key person. The latter option can be difficult to value, but methods include the amount of revenues/profits associated with the key person or the costs required to replace the key person, which includes recruitment, training, and the loss of revenue in the time it takes to replace the individual.


Response: You may be able to take a loan from your 403(b) plan if your employer allows it. Keep in mind that plans aren't required to provide loans from tax-sheltered annuities. If you need to take a loan from your TSA, check with your plan administrator about your rights and responsibilities.


Response: Starting an online business involves some of the same steps as a traditional business, with a few exceptions.You still need to do your market research and develop a business plan before anything else. Once that's done, choose a name and structure for your business, then file any paperwork to register your organization.Rather than finding a physical location, choose a platform and design your website. Before launching your business, you should find a way to build up your target market, whether that's through traditional marketing means or more creative ways like social media.


Response: Real GDP is an inflation-adjusted measurement of a country’s economic output over the course of a year. The U.S. GDP is primarily measured based on the expenditure approach and calculated using the following formula: GDP = C + G + I + NX (where C=consumption; G=government spending; I=Investment; and NX=net exports).


How Recent Should the Proof of Funds Document Be?

Response: The freshness requirement for proof of funds documents can vary, but generally documents no older than 90 days are considered acceptable. Be mindful that certain circumstances may call for documents no older than 30 days. For example, when closing on a mortgage, your mortgage lender will often require proof of funds documentation from the most recent month available.


What Is China's Largest Stock Exchanges?

Response: The largest stock exchange in China is the Shanghai Stock Exchange (SSE). It is also the country's oldest exchange. The SSE was founded in 1891 as the Shanghai Stock and Sharebrokers Association. As of January 2024, the SSE had a market cap of $6.52 trillion (USD) with 2,263 listed companies.


What Is the Difference Between EPS and Adjusted EPS?

Response: Adjusted EPS is a type of EPS calculation in which the analyst makes adjustments to the numerator. Typically, this consists of adding or removing components of net income that are deemed to be non-recurring.For instance, if the company’s net income was increased based on a one-time sale of a building, the analyst might deduct the proceeds from that sale, thereby reducing net income. In that scenario, adjusted EPS would be lower than basic EPS.


Response: Investors can research new launches of funds either by monitoring various investment companies' press releases or by checking NFO-related news aggregate sites such as the Closed-End Fund Center.


I Think I Have Unclaimed Money Out There. What Do I Do?

Response: The National Association of Unclaimed Property Administrators (NAUPA) has a free search tool that can help you track down unclaimed property in all 50 states, some Canadian provinces, and other geographies worldwide like Puerto Rico and Kenya.There are other commercial and governmental unclaimed property search services, online and off. However, note that NAUPA is a nonprofit association of state administrators who actually have custody of all that unclaimed money and want to return it to the rightful owners.


Response: John Maynard Keynes was a ground-breaking British economist who is considered the father of modern macroeconomics. His book, The General Theory of Unemployment, Interest, and Money, was published in 1936 and is the foundation for Keynesian economics.


What Are the Two Main Types of Robotic Process Automation?

Response: Traditional RPA relies on hard-coding routine tasks for automation. This is still the most common form of RPA today. More and more, however, machine learning and AI techniques are being merged with RPA to allow it to do more sophisticated tasks, such as recognizing images, text, or speech; or to analyze unstructured data sets.


Response: The debt-to-income (DTI) ratio is the percentage of your gross monthly income that goes to paying your monthly debt payments and is used by lenders to determine your borrowing risk. A low debt-to-income (DTI) ratio demonstrates a good balance between debt and income. Conversely, a high DTI ratio can signal that an individual has too much debt for the amount of income earned each month. Typically, borrowers with low debt-to-income ratios are likely to manage their monthly debt payments effectively. As a result, banks and financial credit providers want to see low DTI ratios before issuing loans to a potential borrower.


How Are Venture Capitalists Compensated?

Response: Venture capitalists make money from the carried interest of their investments, as well as management fees. Most VC firms collect about 20% of the profits from the private equity fund, while the rest goes to their limited partners. General partners may also collect an additional 2% fee.


Response: The first step in becoming an insurance agent is deciding what kind of insurance agent you want to be, as the type depends on the path to becoming one. You can choose to be either a captive insurance agent or an independent insurance agent. From there, you will need to decide what insurance products you would like to sell to clients.The next step is becoming licensed in your state. The products that you decide you would like to sell will depend on the type of license you will need. You will take your licensing exam and from there you will have to submit a background check and license application to your state's licensing department. Once this is complete, you will need to find an insurance company to work with.


Response: Fannie Mae is a government-sponsored enterprise that is a leading source of conventional mortgage financing in the U.S. This entity is separate from HUD and performs a different function within the mortgage market.


What are some other types of greenwashing?

Response: One common form of greenwashing is to include misleading labeling or bury environmentally unsound practices in the fine print. This can include use of terminology such as “eco-friendly” or “sustainable,” which are vague and not verifiable. Imagery of nature or wildlife can also connote environmental friendliness, even when the product is not green. Companies may also cherry-pick data from research to highlight green practices while obscuring others that are harmful. Such information can even come from biased research that the company funds or carries out itself.


Response: It refers to the fact that the funds relating to a bank deposit made by an accountholder have not yet been received—collected—from the bank that issued the check for deposit. Movement of money, even electronically, must be verified, or cleared, by financial institutions before that money can be made available to customers.


What are the advantages of systematic sampling?

Response: Systematic sampling is simple to conduct and easy to understand, which is why it’s generally favored by researchers. The central assumption, that the results represent the majority of normal populations, guarantees that the entire population is evenly sampled.Also, systematic sampling provides an increased degree of control compared to other sampling methodologies because of its process. Systematic sampling also carries a low risk factor because there is a low chance that the data can be contaminated.


What Is the Golden Rule for Marginal Analysis?

Response: The golden rule of marginal analysis is that an activity should be performed as long as marginal revenue equals marginal cost. Activities that have marginal costs higher than marginal revenue provide negative net benefit to a company.


What Are the Types of Hire Purchase Agreements?

Response: There are two types of hire purchase agreements. Consumer hire purchase agreements are designed for individual consumers purchasing personal products. Industrial hire purchase agreements are for businesses, such as a company purchasing machinery.


What Are Some Examples of Stockholders' Equity?

Response: Every company has an equity position based on the difference between the value of its assets and its liabilities. Positive equity indicates the company has a positive worth. A company's share price is often considered to be a representation of a firm's equity position.


Why Is a Lower Average Collection Period Better?

Response: Companies prefer a lower average collection period over a higher one as it indicates that a business can efficiently collect its receivables.The drawback to this is that it may indicate the company's credit terms are too strict. Stricter terms may result in a loss of customers to competitors with more lenient payment terms.


How Much Assets Are Invested in Funds of Funds?

Response: According to the SEC, Total net assets in mutual funds that invest primarily in other mutual funds reached over $2.54 trillion in 2019.


Response: An economics calendar shows scheduled events, news releases, and other regularly released data that tend to affect trading and investing.


Response: During World War I, before the U.S. entered the war in 1917, U.S. Steel and DuPont's annual profits increased by more than 1,000% each and pressure grew for a "war efforts profit tax." Instituted in October, 1917, the tax raised nearly $7 billion in revenue—nearly 40% of all funds raised for the war—and was the largest source of wartime taxation. As larger companies found ways around the tax, smaller companies were more affected. The tax was abolished in 1921.