Can I get a better rate if I turn a property into my primary residence?

Response: If, after not occupying the property for a long time, you decide to live in it as your primary residence, you may be able to refinance to get a different rate. Keep in mind that every refinance has closing costs, so make sure that you will have a tangible net benefit from refinancing. An example of this would be someone who owns a cabin where they like to vacation who then moves into the cabin full time after retirement. That individual could refinance to get a better rate on their cabin.


Response: A long straddle is an options strategy that an investor makes when they anticipate a particular stock will soon be undergoing volatility. The investor believes the stock will make a significant move outside the trading range but is uncertain whether the stock price will head higher or lower.To execute a long straddle, the investor simultaneously buys an at-the-money call and an at-the-money put with the same expiration date and the same strike price. In many long straddle scenarios, the investor believes that an upcoming news event (such as an earnings report or acquisition announcement) will push the underlying stock from low volatility to high volatility. The objective of the investor is to profit from a large move in price. A small price movement will generally not be enough for an investor to make a profit from a long straddle.


What Is the Difference Between Winding Up and Dissolution?

Response: Winding up and dissolution are both steps in the closing of a business. Winding up comes before dissolution. Winding up refers to closing the operations of a business, selling off assets, paying off creditors, and distributing any remaining assets to the owners. Once the winding-up process is complete, the dissolution step comes into play. This is when the company formally under law ceases to exist. Documentation is prepared to officially end the business as a legal entity.


Why Would You Buy a Forward Rate Agreement?

Response: The main reason to buy a forward rate agreement (FRA) is to hedge against future increases in interest rates. By locking in an interest rate to be paid at a specified date in the future, FRA purchasers provide themselves with a measure of protection should market rates rise.


How Do Gilt Values Change With Interest Rates?

Response: Gilts see their market values change as market rates change. Generally, when interest rates rise, the value of existing bonds falls. When rates fall, bond values rise.


What Is the Difference Between a Pip and a Pippette?

Response: In the context of the foreign exchange market, a pip is a standard unit of measure for changes in an exchange rate, representing a move of 0.0001 (1/10,000). This is the smallest price change increment for most currency pairs.A pipette equals 1/10 of a pip and represents a fraction of 1/100,000.A pip, therefore, relates to movement in the fourth decimal place, while a pipette is used to measure movement in the fifth decimal place.


Response: The Gini index ranges from 0% to 100%, with 0 representing perfect equality and 100 representing perfect inequality. A national Gini of 50 marks the halfway point and can be viewed as a nation where income is not fairly distributed.Only 14 countries in the world have a Gini of 50 or more as of 2024.


Response: The Internal Revenue Service says that almost all individual taxpayers, regardless of income, can now file their federal tax returns electronically free of charge using the IRS.gov website or the IRS2Go app.Through an agreement with the IRS, taxpayers with income below certain levels can use any of a number of tax return software programs.(State taxes are a separate matter, and state rules apply.)


Which Is Better: Term Life Insurance or Whole Life Insurance?

Response: It depends on your family's needs. Term life insurance is a relatively inexpensive way to provide a lump sum to your dependents if something happens to you. If you are young and healthy, and you support a family, it can be a good option. Whole life insurance comes with substantially higher monthly premiums. It is meant to provide coverage for as long as you live. As the coverage matures, the policy grows in value and the policyholder can make withdrawals for any purpose. Thus, it can serve as an investment product as well as an insurance policy.


How Do I Calculate My Effective Tax Rate?

Response: You can easily calculate your effective tax rate as an individual taxpayer. Do this by dividing your total tax by your taxable income. To get the rate, multiply by 100. You can find your total tax on line 24 of Form 1040 and your taxable income on line 15 of the form.


What Is the Main ETF That Trades the Japanese Yen?

Response: The Invesco CurrencyShares Japanese Yen Trust (FXY) is the most common yen ETF which holds physical yen in its account. ProShares also offers two yen ETFs—the ProShares Ultra Yen ETF (YCL) and ProShares UltraShort Yen ETF (YCS). These two options, though, are levered. YCL provides 2x long exposure and the YCS provides 2x inverse exposure to the yen.


Why Is Hyperledger Better Than Ethereum?

Response: Ethereum is designed to be a global public virtual machine that anyone can create applications for. Hyperledger is designed as a permissioned (private) blockchain for business and enterprise uses. So, which is better depends on who is using it and the purpose they have for doing so.


Response: No. Labor is the work carried out by human beings, for which they are paid in wages or a salary. Labor is distinct from assets, which are considered to be capital.


Response: The AFR is released monthly with updated interest rates based on the market interest rates.


Response: A day trader is a trader who makes multiple trades in a single day, rarely (if ever) holding a position overnight. Day traders try to take advantage of intraday price movements and market inefficiencies to make money. They tend to use technical analysis to help them time their market entries and exits. Day trading requires focus, dedication, and discipline.


Response: Risk reversals work by establishing a position in the options market that is either skewed towards bullish or bearish sentiments. For instance, in a bullish risk reversal, an investor might buy a call option. This position would benefit from upward price movement. At the same time, the investor could sell a put option.


Response: This rule covers insider trading and lays out various ways in which insiders can manipulate securities in their favor and against the general investing public. It also provides ways for insiders to rightfully transact in their own company’s stock, creating a trading plan that serves as an affirmative defense to insider trading rules.


Response: Unsystematic risk—when it comes to investing in stocks—can be measured by the unsystematic variance. That is calculated by subtracting systematic variance from the total variance.


Response: In 2001, energy giant Enron filed for bankruptcy. Accounting reports had been fabricated to make the company appear to have more money than what was actually earned. These falsifications allowed the company’s stock price to increase during a time when executives were selling portions of their stock holdings. When Enron declared bankruptcy, it was the largest U.S. bankruptcy at that time. Although Enron's management had the responsibility to care for the shareholder’s best interests, the agency problem resulted in management acting in their own best interest.


What Is the Difference Between Appraised Value and Market Value?

Response: In real estate, the appraised value of a property is the price estimate calculated by a professional appraiser, based on sales of comparable properties. The market value is the actual price that the property will sell for. This may be higher or lower than the appraised value, depending on market conditions.


Response: Ceteris paribus in economics is a reference to how one isolated variable may change an economic environment assuming all other variables remain the same. In economics, ceteris paribus is often highly hypothetical as national economics and macroeconomic conditions are highly intricate and complex. However, ceteris paribus is the practice of seeing how a single economic concept (i.e. inflation) can impact broader concepts.


Response: Quantity demanded is affected by the price of the product. If the price goes up, the demand will go down. If the price goes down, demand will go up. Price and demand are inversely related in this way.


Response: The timing of interest being capitalized will greatly vary depending on the interest itself. For student loans, interest is capitalized as part of the loan agreement and type of loan. This may also depend on the type of education (undergraduate vs. graduate) being pursued. On the other hand, interest is often capitalized during construction when an asset's development is underway.


What Are the Three Factors of the Model?

Response: The Fama and French model has three factors: the size of firms, book-to-market values, and excess return on the market. In other words, the three factors used are SMB (small minus big), HML (high minus low), and the portfolio's return less the risk-free rate of return. SMB accounts for publicly traded companies with small market caps that generate higher returns, while HML accounts for value stocks with high book-to-market ratios that generate higher returns in comparison to the market.


Response: Businesses large and small tend to have just enough resources to maintain current operations. If they want to take on a new project they have neither the resources nor the expertise on hand to add it to the workload.In such cases, the RFP gives the business an efficient way to recruit the expertise they need to get the project done.


How Does Credit Spread Affect Bond Price?

Response: The credit spread is the result of the difference in risk. Corporate bonds come with more risk than U.S. Treasury bonds, so they need to offer higher yields in order to attract investors. The price you pay for either bond may be the same, but you are assuming a higher risk with corporate bonds, which means you have the potential to earn more.


Response: No, the Series 65 license does not expire as long as you are actively working in the financial services industry. If you leave the industry for more than two years, your new employer may require you to pass the Series 65 exam again.


Response: A gift card is a prepaid card that can be used to make purchases and execute other types of financial transactions. Gift cards be open loop or closed loop, which can determine where and how the card can be used.


Response: An ACATS transfer is initiated by a brokerage customer at the receiving institution by submitting a Transfer Information (TI) record. The TI contains all of the information needed to identify the customer's existing brokerage account and where it will be delivered. The delivering firm must respond to the output within one business day, by either adding the assets that are subject to the transfer or by rejecting the transfer. Before delivery is made, a review period is opened during which the sending and receiving firm can confirm the assets to be transferred.


Can You Withdraw Money From a Custodial Account?

Response: Yes, money can be withdrawn from custodial accounts, as long as it is used "for the benefit of the minor," a vague term that includes, but is not limited to educational costs.


Response: Ukrainian citizens and residents can buy war bonds through a Ukraine-licensed broker or bank. Although overseas institutional investors can also buy war bonds, it is not clear if they will be available to foreign retail investors.


Response: It's a tax that applies to high-income individuals who otherwise (under the standard U.S. tax system) might pay little or even no taxes. Essentially, it involves an alternate tax system that is used in addition to the standard system. Each calculates tax owed. The taxpayer pays whichever is greater.


What Is the Difference Between Frictional and Cyclical Unemployment?

Response: Cyclical employment is the natural ebb and flow of the economy. As the economy develops, more jobs are created and more workers are employed. As the economy cools, those jobs may be eliminated and cyclical unemployment occurs. On the other hand, frictional unemployment occurs usually when the economy is doing well. Frictional unemployment is when workers voluntarily seek out other opportunities to better their lives and careers.


How Does Social Media Influence Market Sentiment?

Response: Social media has become a significant factor in shaping market sentiment. Platforms like Reddit can amplify market sentiment and the opinions of a few contrarians, often leading to rapid, sentiment-driven moves in stock prices. For instance, a trending hashtag or a viral post about a company can quickly sway public perception, impacting its stock performance.


What Are the Different Types of Bills of Exchange?

Response: A bill of exchange issued by a bank is referred to as a bank draft. The issuing bank guarantees payment on the transaction. A bill of exchange issued by individuals is referred to as a trade draft. If the funds are to be paid immediately or on-demand, the bill of exchange is known as a sight draft. In international trade, a sight draft allows an exporter to hold title to the exported goods until the importer takes delivery and immediately pays for them. However, if the funds are to be paid at a set date in the future, it is known as a time draft which gives the importer a short amount of time to pay the exporter for the goods after receiving them.


Is Estate Planning Only for the Wealthy?

Response: There is a myth that estate planning is only for high-net-worth individuals. But that's not true. In fact, estate planning is a tool that everyone can use. Estate planning makes it easier for individuals to determine their wishes before and after they die. Contrary to what most people believe, it extends beyond what to do with assets and liabilities. In fact, estate planning can also answer questions about the guardianship of minor children and pets, what to do when it comes time for your funeral, and what charities you want to support after you die.


Who Can Qualify For a Non-Recourse Loan?

Response: Because non-recourse debt poses a greater risk to the lender, a borrower may need high credit scores and a low loan-to-value ratio. The interest rates on non-recourse loans may also be higher to compensate for the risk.


Did Subprime Lending Cause the 2008-09 Financial Crisis?

Response: Most experts agree that subprime mortgages were an important part of the financial crisis. When it comes to the subprime mortgage part of the crisis, there was no single entity or individual at whom one could point the finger. Instead, this crisis involved the interplay between the world's central banks, homeowners, lenders, credit rating agencies, underwriters, and investors.


How Do Cost of Debt and Cost of Equity Differ?

Response: Debt and equity capital both provide businesses with the money they need to maintain their day-to-day operations. Equity capital tends to be more expensive for companies and does not have a favorable tax treatment. Too much debt financing, however, can lead to creditworthiness issues and increase the risk of default or bankruptcy. As a result, firms look to optimize their weighted average cost of capital (WACC) across debt and equity.


Response: If a company issues a 5% stock dividend, it would increase the number of shares by 5%, or one share for every 20 shares owned. If a company has one million shares outstanding, this would translate into an additional 50,000 shares. A shareholder with 100 shares in the company would receive five additional shares.


Response: To calculate the Sharpe ratio, investors first subtract the risk-free rate from the portfolio’s rate of return, often using U.S. Treasury bond yields as a proxy for the risk-free rate of return. Then, they divide the result by the standard deviation of the portfolio’s excess return.


What Is the Difference Between an Arm’s Length Transaction and Other Sales?

Response: The term “arm’s length transaction” refers to transactions that are conducted between parties who are acting independently from one another and are not associated with one another outside of the transaction in question.By contrast, a transaction would not be “arm’s length” if the buyer and seller are personally related—such as family members or personal friends. Transactions between related businesses, such as those made between a parent company and its subsidiary, would also not be arm’s length.


Response: Monetization literally means to convert something into money. In practice, this means turning things into revenue-generating activities, services, or assets.


Response: Yes, trade lines communicate to lenders your prior creditworthiness and details how much debt you have, what your current minimum monthly payments are, and what your historical payment delinquencies are.


How Was the Risk of Loss or Damage Handled in DES?

Response: The risk of loss or damage in a DES transaction is borne by the seller until the goods are delivered to the named port of destination. Once the goods arrive at the port, the risk transferred to the buyer.


What Are Some Examples of Money Market Instruments?

Response: The money market is composed of several types of securities including short-term Treasuries (e.g. T-bills), certificates of deposit (CDs), commercial paper, repurchase agreements (repos), and money market mutual funds that invest in these instruments. The money market funds typically have shares that are always priced at $1.


Is the GBP Still Considered a Reserve Currency?

Response: The British pound was a dominant currency and considered the primary reserve currency in which other nations held excess cash. However, with the declining influence of the British Empire following World War I and World War II, the U.S. dollar (USD) assumed the reserve currency status that the pound previously held. By the early 21st century, the dollar was the world’s leading reserve currency, followed by the euro (EUR). According to the International Monetary Fund (IMF), the pound has settled into fourth place, trailing the Japanese yen (JPY).


Response: NCDs are short-term investments with terms ranging from a week up to a year on average.


Response: The H-share Index is the Hang Seng China Enterprises Index (HSCEI), which is a stock exchange index that tracks the H-shares in China. The H-shares are mainland Chinese companies listed on the Hong Kong Stock Exchange available to foreign investors. There are over 300 Chinese companies that have H-shares.


What Are the Tax Implications of Guaranteed Payments to Partners?

Response: These can get rather complicated, but basically a guaranteed payment to a partner is treated as ordinary income of the partner and taxed as such. The partnership can either take a guaranteed payment as a tax deduction or capitalize it.


Response: A scrip dividend is when a company gives its shareholders the option of receiving a dividend in either cash or company stock. Receiving a dividend in stock allows the shareholder to grow their holdings without having to buy the shares on the open market, while also allowing the company to reinvest the extra capital into its operations. There may also be tax advantages to receiving a non-cash dividend.


Can You Use a 203(k) Loan for All Improvements?

Response: No. Anything considered extravagant or luxurious—such as a tennis court, gazebo, or a new swimming pool—is not allowed. However, most repairs and upgrades do qualify, including rehabbing an existing swimming pool.


Response: Current assets generally fall under one of six sub-accounts in the Current Assets account: Cash and Cash Equivalents, Inventory, Accounts Receivable, Marketable Securities, Prepaid Expenses, and Other Liquid Assets. However, other current asset accounts are specific to industries and businesses, such as Non-Trade Receivables, Restricted Cash, Net Receivables, or Current Deferred Assets.


Response: Selling expenses include both indirect and direct business costs:Indirect selling expenses include advertising and marketing costs, the company's telephone bills and travel costs, and the salaries of its sales personnel. Such expenses occur throughout the manufacturing process and even after the product is finished.Direct selling expenses are incurred only when the product is sold and are related to the fulfillment of orders. They include the costs of shipping and shipping supplies, delivery charges, and the payment of sales commissions.


Why Can Stocks Be So Volatile in After-Hours Trading?

Response: Lower trading volume and less liquidity results when fewer traders and investors are in the market. This causes wider bid-ask spreads and, in turn, greater stock price volatility. This is the challenging trading environment that can exist in after-hours trading.


What Are the Different Types of Bank Guarantees?

Response: Two key types of bank guarantees include a tender bank guarantee (bid bond) and a performance guarantee. The tender bank guarantees to reimburse the buyer (who has already supplied some funding) if you, the supplier, don't sign a contract or fulfill conditions. Performance-based guarantees are for obligations laid out in a contract, such as particular tasks.


Response: This is a phrase used by many second-hand shops. Consignment only refers to an arrangement where goods are placed in the care of store until the item is bought by a buyer. The owner of the goods — the consignor – retains ownership of the items until they sell.


What Is the Difference Between an HMO and Health Insurance?

Response: Coverage under an HMO is generally pretty restrictive and comes at a lower cost to insured parties. Traditional health insurance, on the other hand, charges higher premiums, higher deductibles, and higher co-pays. But health insurance plans are much more flexible. People with health insurance don’t need to have a primary care physician (PCP) to outline treatment. Health insurance also pays some of the costs for out-of-network providers.


What Was the Difference Between a Jobber and a Broker?

Response: A stockjobber functioned like a market maker in stocks, buying and selling shares for their own account, and earning money from the bid-ask spread. A stockbroker instead facilitates orders on behalf of customers, earning a commission. A broker may have bought or sold securities from a jobber for their clients.


Response: While there is no direct way to measure the utility of a certain good for an individual consumer, it is possible to estimate utility through indirect observation. For example, if a consumer is willing to spend $1 for a bottle of water but not $1.50, economists can safely state that a bottle of water has economic utility somewhere between $1 and $1.50. However, this becomes difficult in practice because of the number of variables that are present in a typical consumer's choices.


Is a Transcript Sufficient for My Mortgage Lender?

Response: Transcripts can typically be used as a substitute for an exact copy of a return by mortgage lending agencies. In fact, they were created specifically to supply mortgage lenders with the tax return information of their borrowers.


Response: With shares trading for around $90/each, Enron was once worth about $70 billion. Leading up to its bankruptcy, the company employed over 20,000 employees. The company also reported over $100 billion of company-wide net revenue (though this figure has since been determined to be incorrect).


What Is the Difference Between an OCIP and Wrap-Up Insurance?

Response: OCIP (Owner Controlled Insurance Program) and wrap-up Insurance are both types of insurance policies used in construction projects. The main difference lies in who obtains and controls the insurance coverage. In an OCIP, the project owner purchases and manages the insurance, while with wrap-up coverage, the general contractor or project sponsor obtains and oversees the policy. The coverage provided and the parties covered may vary in each type of insurance.


Which Tax Triggered the Rebellion Against Great Britain?

Response: The Stamp Act of 1765 angered many colonists as it taxed every paper document used in the colonies. It was the first tax that the crown had demanded specifically from American colonists.


What's the Difference Between Supplemental Security Income and Social Security?

Response: Supplemental Security Income (SSI) provides monthly cash payments to help elderly or disabled people who have little to no income meet basic needs. This program is separate from the retirement and disability benefits under Social Security.


How Are Intentionally Defective Grantor Trusts Taxed?

Response: IDGTs are not taxed when assets are sold into them or if they appreciate because there is no recognition of capital gains. However, the grantor pays income taxes if there is income from the IDGT.


Response: A bank's living will is a legal report filed annually by companies instructing how the business will be liquidated in the event of insolvency. Banks with at least $50 billion in assets are required to file a living will with regulators.


How Do I Endorse a Check Without Recourse?

Response: Endorsing a check and adding "without recourse" to the signature means that the endorser assumes no responsibility if the check bounces for insufficient funds.


Response: The term "zero-sum" comes from the fact that some situations require winners to gain at the expense of losers, such that the net value of the system remains unchanged. For example, a winner with +3 would result in, say, two losers, one with -1 and one with -2. The sum is zero (3 - 2 - 1).


Response: No, not necessarily. In 2018, the U.S. Supreme Court opened the door for sports betting throughout the country if states decide in favor of it. Some 33 states have since moved to legalize sports betting, effectively ending the need for bookies to operate illegally in those states. It is still fully illegal in 17 states.However, that isn’t to say that all bookmakers are law-abiding. Betting is still illegal in some states, and some bookies may prefer to conduct business under the table to avoid facing obstacles and paying taxes.


Response: Symmetric data is observed when the values of variables appear at regular frequencies or intervals around the mean. Asymmetric data, on the other hand, may have skewness or noise such that the data appears at irregular or haphazard intervals.


If I Own an ADR, Is It the Same As Owning Shares in the Company?

Response: ADRs are U.S. dollar-denominated certificates that trade on American stock exchanges and track the price of a foreign company's domestic shares. ADRs represent the prices of those shares but do not grant you ownership rights as common stock typically does.


Response: Whipsaws can cause losses for traders by triggering closing trades, only to be reversed in short order. Traders are often stopped out when a market whipsaws, or moves sharply in one direction before returning to its original state. For example, a stock may whipsaw during an earnings announcement or other market moving event. This can execute stop-loss orders that close out positions, even as the stock subsequently rebounds.


Response: Franchise tax deadlines vary by state. In Delaware, the franchise tax deadline is March 1 of each year.


Response: The most common underlying assets are stocks, commodities, bonds, and currencies. However, there are also derivatives with more abstract underlying values, such as interest and benchmark rates.


How Can I Find Out if Someone Is Using My Social Security Number?

Response: There's no easy way to check and see whether your Social Security number has been compromised. Many people don't find out until it's too late. However, there are a few ways you can keep up-to-date with any unusual activity that may be related to someone else using it. You can monitor your credit reports and bank accounts, verify your income with the Social Security Administration, and request tax transcripts with the IRS.


Response: You'll mail Form 1310 to the same Internal Revenue Service Center where the original tax return was filed.


Response: Yes. The EFTA requires banks to limit the amount of money that can be withdrawn from your account during any given time period. Most banks set the limit at $200 or $300 each day, meaning you cannot electronically withdraw more than this amount in cash within a 24-hour period.


What are Common Forms of Inorganic Growth?

Response: Based on a survey of 1,300 CEOs by PwC, 40% said they were planning on targeting a joint venture to boost revenues, 37% were considering a merger or acquisition, 32% were planning on working with startups, and 14% were planning on selling a business.


Response: Countries with larger GDPs will have a greater amount of goods and services generated within them, and will generally have a higher standard of living. For this reason, many citizens and political leaders see GDP growth as an important measure of national success, often referring to GDP growth and economic growth interchangeably.GDP enables policymakers and central banks to judge whether the economy is contracting or expanding, whether it needs a boost or restraint, and if a threat such as a recession or inflation looms on the horizon. By accounting for inflation, real GDP is a better gauge of the change in production levels from one period to another.


Why Is the Triple Bottom Line Important?

Response: A company's triple bottom line is important because it de-prioritizes the importance of financial performance. This alternative reporting metric encourages companies to set social, environmental, philanthropic, and non-financial goals instead of purely making decisions on what will maximize profit. In addition, triple bottom line is important for investors considering what companies invest in. Some may elect to invest in companies that may be reporting less financial profit but yielding stronger philanthropic results.


Response: You can profit from a value stock by buying the equity and holding it. As opposed to attempting to swing trade or look for quick appreciation of capital, value stocks may take longer to appreciate in value as the market comes to fully realize its value. In addition, you can make money from value stocks as they generally issue dividends, allowing for cash proceeds during this holding period.


Response: The easiest way to invest in an oil ETF is through a brokerage like Fidelity or TD Ameritrade. Search for the ticker symbol of the ETF you want or use the brokerage's screener to search for "oil ETFs."


Response: The basic tenet of the lemons principle is that low-value cars force high-value cars out of the market because of the asymmetrical information available to the buyer and seller of a used car. This is primarily because a seller does not know the value of a used car and, therefore, is unwilling to pay a premium on the chance that it might be a lemon. Premium-car sellers are not willing to sell below the premium price, so only lemons are sold.


How Do You Calculate the Margin of Safety in Accounting?

Response: To calculate the margin of safety, determine the break-even point and the budgeted sales. Subtract the break-even point from the actual or budgeted sales and then divide by the sales. The number that results is expressed as a percentage.


Response: KYC in the banking sector requires bankers and advisors to identify their customers, beneficial owners of businesses, and the nature and purpose of customer relationships. Banks must also review customer accounts for suspicious and illegal activity and maintain and ensure the accuracy of the customer accounts.


Response: Goodness-of-Fit is a statistical hypothesis test used to see how closely observed data mirrors expected data. Goodness-of-Fit tests can help determine if a sample follows a normal distribution, if categorical variables are related, or if random samples are from the same distribution.


Response: Although ESOs have no intrinsic value when granted, they are not worthless. Because of their lengthy time to expiration compared to listed options, ESOs have a significant amount of time value that should not be frittered away through early exercise.


How Long Can You Eat Food Past Its Expiration Date?

Response: Here's some advice from the U.S. Department of Agriculture:Canned goods will last for years if they're not opened and the can isn't damaged, no matter what the "best by" date is.Packaged foods like cereal and pasta are safe well past any "best by" date, but may eventually acquire a stale or "off" taste.Meat will keep for months in the freezer, but may eventually lose some of its flavor. It will not be unsafe. Bacteria doesn't grow in freezers.The USDA also has a chart indicating the shelf life of many food products.


Who Is Eligible for a TIAA-CREF Retirement Plan?

Response: These plans are available to workers in the nonprofit sector in academic, research, medical, government, and cultural fields. TIAA was originally started in 1918 to provide pensions for professors.


Response: The Norwegian Krone is generally considered a safe currency, in that its value is not likely to be affected by failures in other markets. Although it is occasionally affected by domestic troubles, the Norwegian economy is relatively stable and the currency is unlikely to see any sharp changes in value.


Is a Money Purchase Plan an Employer Sponsored Retirement Plan?

Response: A money purchase plan is considered an employer-sponsored retirement plan that requires companies to contribute a specific percentage of an employee's salary each year, regardless of the company's profitability.


Response: The gravestone doji shows up in a series of candlestick patterns. The opening, closing, and high prices may be equal or nearly the same. When this happens, the possibility of a trend reversal is likely with a new bearish trend on the horizon. In order to take advantage of the trade, make sure you confirm there's a trend reversal on the way after you identify the pattern. Then, enter your position once the next candle closes below the closing price of the candlestone doji. Set your stop-loss at the highest point of the candle and be prepared to take your profit. You can also enter the trade above the closing price. Just be sure you set your stop-loss at the lowest point of the gravestone candle before you take your profit.


How Can You Find Out if Your Credit Card Uses the Average Daily Balance Method?

Response: The credit card agreement you received when you signed up for the card will tell you what method the issuer uses to determine your finance charges, along with other information. If you no longer have a copy you can request one from the issuer. According to the Consumer Financial Protection Bureau, "By law, the issuer must make your agreement available to you upon request."


What Are Some Examples of Qualitative Data?

Response: Qualitative data can take many forms. Common types include transcripts generated from one-on-one interviews, free text responses on surveys, narratives, quotations, text documents, images, or observations taken down in a notebook or research journal.


What Is the Difference Between a K-1 and Form 1065?

Response: A K-1 document is prepared for each partner, shareholder, or beneficiary. A partnership then files Form 1065, the partnership tax return that contains the activity found on each partner's K-1.


Response: The earned credit rate is an interest rate many banks give their institutional customers on their balances.


Response: Behavioral finance combines psychological theories with conventional economics and finance to explain why people make irrational financial decisions. It challenges the traditional assumption that investors should be rational and markets are ultimately efficient. Instead, behavioral finance suggests that various cognitive biases, emotions, and other psychological factors can significantly influence investor behavior and market outcomes. The field examines how these factors can lead to anomalies in financial markets, and the January effect has long been seized upon as an example that deviates from logical, profit-maximizing behavior.


Response: The forex market, or foreign exchange market, allows banks, funds, and individuals to buy, sell or exchange currencies. The market operates 24 hours, 5.5 days a week, and is responsible for trillions of dollars in daily trading activity as traders look to profit by betting that a currency's value will either appreciate or depreciate against another currency.


Response: Clean and dirty prices are used when discussing the Gilt price on the secondary market. The clean Gilt price is its price without accrued interest. The dirty price is the total price you must pay to buy a Gilt, equal to its clean price plus any accrued interest since its last interest payment date.


What Securities Can Be Traded in the Pre-Market Session? Options?

Response: Generally, only listed stocks can be traded in the pre-market session. Not all stocks, though. Stocks such as those that have a limited float or are not widely held, or small-cap stocks, may not have sufficient volumes to make pre-market trading a viable proposition. Options cannot be traded in the pre-market session.


What Are the Similarities Between ADTV and Open Interest?

Response: ADTV and open interest are similar in some ways. Both are used to measure trading activity, can be used to assess liquidity, and can be employed to identify trends. Also, ADTV and open interest can be used to identify trends as well as support and resistance levels.


How Do You Calculate Variable Cost-Plus Pricing?

Response: The variable cost-plus pricing method is calculated by adding a markup to the per-unit costs of producing each additional good. For example, if the materials, labor, and transportation for each bottle of Pepsi add up to $1.00, the total price might be marked as $1.20. Although this model does not include fixed costs, such as facilities and utilities, it is assumed that the markup is sufficiently high to cover these costs.


What Types of Loans Are Eligible for Modification?

Response: Although many loans may have options for modification, mortgages are the most commonly modified loans. Your loan holder may have a specific program in place for times of need.


Response: A poison pill defense is a strategy employed by a company to prevent a hostile takeover. It is used when a potential acquirer owns a large portion of a company's outstanding shares. A poison pill strategy allows existing shareholders (but not the potential acquirer) to purchase additional shares at a discounted price, thereby diluting the value of the potential acquirer's shares.To control a significant portion of the company again, the potential acquirer would have to spend more money purchasing shares, making the attempted takeover more expensive.


Where Are Earnings Listed on a Financial Statement?

Response: Earnings are often referred to as a company's "bottom line" because they are listed on the literal bottom line of the financial statement. They are often labeled "net income" (or "net losses").


Response: Yes, any stock can go to zero. While it is highly unlikely that a stock will go to zero, it is possible, particularly if a company goes bankrupt. If you owned the stock and it fell to zero, you would lose the entire amount you invested in the stock.


Response: The CFP exam requires a lot of preparation and covers a wide range of topics in depth. The best way to ensure you pass the CFP exam is by preparing for it well in advance and sticking to a study schedule.


Did the Altman Z-Score Predict the 2008 Financial Crisis?

Response: In 2007, Altman's Z-score indicated that the companies' risks were increasing significantly. The median Altman Z-score of companies in 2007 was 1.81, which is very close to the threshold that would indicate a high probability of bankruptcy. Altman's calculations led him to believe a crisis would occur that would stem from corporate defaults, but the meltdown, which brought about the 2008 financial crisis, began with mortgage-backed securities (MBS); however, corporations soon defaulted in 2009 at the second-highest rate in history.


Does the Qualified Domestic Trust Eliminate Estate Taxes?

Response: No, it simply defers them until after the death of the surviving spouse.


Response: Individuals and groups can set up nonconnected committees, which may accept contributions from the general public. Corporations, labor unions, and trade associations can establish separate segregated funds, which can only accept contributions from their members.


Response: As a general guideline, 43% is the highest DTI ratio a borrower can have and still get qualified for a mortgage. Ideally, lenders prefer a debt-to-income ratio lower than 36%, with no more than 28%-35% of that debt going towards servicing a mortgage. The maximum DTI ratio varies from lender to lender. However, the lower the debt-to-income ratio, the better the chances that the borrower will be approved, or at least considered, for the credit application.


Response: Cluster sampling is a form of probability sampling. When researchers conduct cluster sampling, they divide the population into smaller groups. They then select individuals randomly from these groups to form their samples and conduct their studies. This kind of sampling is used when both the overall population and sample size is too large to handle.


Response: Price insensitive is the opposite of price sensitive. It means demand remains the same when the price goes up or down.


Why Is Human Resource Planning Important?

Response: Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.


What Is the Difference Between a Letter of Credit and Letter of Guarantee?

Response: A letter of credit is like a letter of guarantee, assuring that a borrower can pay what they owe. Typically, letters of credit are more commonly used in international trade, while letters of guarantee are used for domestic purposes, such as real estate contracts.


Response: A cash advance is considered a short-term loan and can be taken from a credit card, if you have enough balance on your account, or as a payday loan.


Response: A-B trusts are also known as bypass trusts or credit shelter trusts. The goal of these trusts is to reduce estate taxes between married couples.


Response: The key to dealing with mental accounting and not succumbing to it is to treat money as interchangeable and not give it labels. Don’t consider certain money less important because it came from an unexpected source or continue to park money in a savings account paying little to no interest when you have debts to repay with much higher borrowing costs.


What Does Adjusted Gross Income (AGI) Mean for Tax Payments?

Response: Adjusted gross income (AGI) is essentially your income for the year after accounting for all applicable tax deductions. It's an important number that's used by the IRS to determine how much you owe in taxes. AGI is calculated by taking your gross income from the year and subtracting any deductions that you're eligible to claim. Your AGI will always be less than or equal to your gross income.


Who Urged Congress to Pass the Civil Rights Act as Part of His Vision for a Great Society?

Response: Before his untimely death, President John Kennedy asked Congress in 1963 for a comprehensive civil rights bill. When Lyndon B. Johnson became the president after Kennedy's death, he urged Congress to pass the Civil Rights Act as part of his (and the late Kennedy) vision for a "Great Society."


Response: Look at the numbers. A low number for assets under management (AUM) indicates a fund that is not currently attracting strong interest from investors. A low trading volume indicates the same.It's not a question of whether it is a good or a bad ETF. If it's not attracting enough interest, it's headed toward zombie land.


How Is a Home Office Defined by the IRS?

Response: The term "home" for purposes of tax deduction includes a house, apartment, condominium, mobile home, or boat. It also includes structures on the property like an unattached garage, studio, barn, or greenhouse.


Response: In contrast to operating income, non-operating income is the portion of an organization's income that is derived from activities not related to its core business operations. It can include items such as dividend income, interest, gains or losses from investments, as well as those incurred in foreign exchange and asset write-downs.


Why Is the Price of My Bond Different From Its Face Value?

Response: A bond's face or par value will often differ from its market value. This has to do with several factors including changes to interest rates, a company's credit rating, time to maturity, whether there are any call provisions or other embedded options, and if the bond is secured or unsecured. A bond will always mature at its face value when the principal originally loaned is returned.


What Is the Difference Between Commercial and Residential Real Estate?

Response: Residential real estate is used exclusively for private living quarters. Commercial real estate refers to any property used for business activities. Types of commercial real estate include hospitals, assembly plants, storage warehouses, shopping centers, office spaces, or any other location for a business enterprise.


Response: The total number of bitcoins in existence was 19.64 million on Feb. 24, 2024. The number left to be mined was about 1.36 million.


Response: An example of a code of ethics would be a business that drafts a code outlining all the ways the business should act with honesty and integrity in its day-to-day operations, from how its employees behave and interact with clients, to the types of individuals it does business with, including suppliers and advertising agencies.


What Is the Difference Between a 401(k) and a Deferred Compensation Plan?

Response: A deferred compensation plan is generally an addition to a company 401(k) plan and may be offered only to a few executives and other key employees as an incentive.Deferred compensation plans are not strictly regulated. They are "non-qualified," meaning that they don't have to stick strictly to federal regulations regarding retirement plans.Financial advisors usually suggest using a deferred compensation plan only after having made the maximum possible contribution to a 401(k) plan—and only if the employer is very solid financially.


Response: A parent can act as a guarantor and often does for a child for their child's first rental property, as the child's income is usually not high enough at a young age.


What Are Some Common Examples of Interactive Media?

Response: You most likely engage in interactive media repeatedly all day. You've done so when you check in to your Instagram, X, or Facebook account, or when you tap into your Uber phone app to arrange for a ride home. Maybe you take care of some personal finance issues on your smartphone as well. All these are examples of interactive media.


How Much Does a Suit To Quiet Title Cost?

Response: A quiet title action will typically cost between $1,500 to $5,000 or more, depending on what state the action takes place in and the complexity of the claim.


What can I do if I’m being harassed by a debt collector?

Response: If you feel that a debt collector has violated the FDCPA, you may contact the Consumer Financial Protection Bureau (CFPB) or your state’s attorney general.


Response: In finance, a headwind refers to forces that act to slow or limit growth. A "secular headwind" refers to long-term factors that act as a dampener to market growth during the upswing of the business cycle.


Can I Use a Target-Date Fund in My 401(k) or Individual Retirement Account?

Response: Yes. Most plan providers today offer access to target-date funds. However, for these to work properly be careful to only use a target-date fund for nearly all of your allocations. This is because if you allocate money to other investments it may defeat the purpose of the glide path provided in the target-date fund.


Response: Most people perceive a higher GDP to be a good thing because it is associated with greater economic opportunities and an improved standard of material well-being. It is possible, however, for a country to have a high GDP and still be an unattractive place to live, so it is important to also consider other measurements.For example, a country could have a high GDP and a low per-capita GDP, suggesting that significant wealth exists but is concentrated in the hands of very few people. One way to address this is to look at GDP alongside another measure of economic development, such as the Human Development Index (HDI).


What's the Main Benefit of Fundamental Analysis in Business?

Response: Investors can use fundamental analysis to get insights into a company's value, risk, and growth potential, and thus make informed decisions.


Response: A stock event is when a company's stock undergoes a change, such as a stock split, reclassification, dividend payment, stock combination, or any other event that impacts shareholders.


Response: By law and IRS regulation, REITs must pay out 90% or more of their taxable profits to shareholders as dividends. As a result, REIT companies are often exempt from most corporate income tax. An increasing number of REITs offer the reinvestment of shareholder dividends. Shareholders of REITs who receive dividends are taxed as ordinary dividends.


Response: Acquiring other companies can serve many purposes for the parent company. First, it can allow the company to expand its product lines or offerings. Second, it can cut down costs by acquiring businesses that feed into its supply chain. It can also acquire competitors in order to maintain market share and reduce competition.


Response: As of June 30, 2022, the NFA has 3,107 members.


Response: Overdraft protection is optional; it is only the service that is automatic for bank customers who choose to opt in for overdraft protection on their checking or savings accounts.


Can I Hold Onto a Target-Date Fund After the Target Date?

Response: Yes. However, it may behave differently depending on the type of target-date fund you have. A "through fund" will continue adjusting its asset allocation toward more conservative holdings as time passes; a "to-fund" will retain its final asset allocation as of its maturation date indefinitely.


Why Is Nominal GDP Higher Than Real GDP?

Response: Nominal GDP is higher than real GDP because it takes current market prices into consideration. Conversely, real GDP is lower than nominal GDP because it takes market price changes into consideration.


Response: During the last three months of the year, Company A made a total of $1,500,000 in credit sales and had $1,050,000 in accounts receivable. The time period covers 92 days. Company A’s DSO for that period is calculated as follows:1,050,000 divided by 1,500,000 equals 0.7.0.7 multiplied by 92 equals 64.4.The DSO for this business in this period is 64.4.


Response: Compensation is commonly based on the average weekly wage. The calculation involves multiplying the daily wage of the employee by the number of days worked in a full calendar year. The resulting number is then divided by 52 (weeks) to arrive at the average weekly wage.


Where does the word "imprest" come from?

Response: The word is derived from the early Italian or medieval Latin imprestare, which meant to lend. Thus, an imprest now means a small advance of funds used for incidentals, and which must be replenished after use.


How do you draw a Fibonacci retracement?

Response: Fibonacci retracements are trend lines drawn between two significant points, usually between absolute lows and absolute highs, plotted on a chart. Intersecting horizontal lines are placed at the Fibonacci levels.


How Can You Use Sweat Equity to Reduce Taxes on Your Home?

Response: If you make significant improvements to your home, you can itemize these expenses and deduct them on Schedule A of Form 1040. When you sell the home, you may be able to exclude any profit that can be attributed to sweat equity, such as construction, plumbing, or electrical work.


When Was the London Stock Exchange Established?

Response: The LSE was formed in 1801 as London's first regulated exchange.


Response: Hubris is a negative trait. Those exhibiting or imbued with hubris will be seen as extremely arrogant and usually out of touch.


How Many Companies Are Listed on the Tokyo Stock Exchange?

Response: As of February, 2024, there were 3,930 listed companies on the Tokyo Stock Exchange. They have a combined market capitalization of 977 trillion yen ($6.6 trillion).


How Are Closed-End Funds Different From Open-End Funds?

Response: An open-end mutual fund issues new shares whenever an investor chooses to buy into it and repurchases them when they're available. A closed-end fund issues shares only once. Closed-end funds also tend to use leverage, or borrowed money, to boost their returns to investors. That means higher potential rewards in good times and higher potential risks in bad times.


Should the Government Be Getting Involved With the Economy?

Response: One of the biggest obstacles facing policymakers is deciding how much direct involvement the government should have in the economy and individuals' economic lives. Indeed, there have been various degrees of interference by the government over the history of the United States. For the most part, it is accepted that a certain degree of government involvement is necessary to sustain a vibrant economy, on which the economic well-being of the population depends.


What Is a Fixed Rate vs. Variable Rate Bond?

Response: Fixed-rate bonds pay the same interest rate over their entire maturity. These can be contrasted with floating or variable rate bonds, which periodically reset the interest rate paid based on prevailing rates in the market.


What’s the difference between a perpetual inventory system and a periodic inventory system?

Response: A perpetual inventory system uses point-of-sale terminals, scanners, and software to record all transactions in real time and maintain an estimate of inventory on a continuous basis. A periodic inventory system requires counting items at various intervals—i.e., weekly, monthly, quarterly, or annually.


What Did Enron Do That Was So Unethical?

Response: Enron used special purpose entities to hide debt and mark-to-market accounting to overstate revenue. In addition, it ignored internal advisement against these practices, knowing that its publicly disclosed financial position was incorrect.


Response: The true identity is unknown of the person who inadvertently coined the term "HODL". The original misspelling of the word occurred in a post by the user "GameKyuubi" on the Bitcointalk.org online forum, at 10:03 a.m. UTC on Dec. 18, 2013.


What Are the Most Important Profitability Ratios?

Response: The profitability ratios often considered most important for a business are gross margin, operating margin, and net profit margin.


What Is Josef Ackermann's Business Relationship With Donald Trump?

Response: Donald Trump relied on Deutsche Bank for financing and Josef Ackermann allegedly approved Trump's financing even after Trump had defaulted on loans in 2004 and 2008. However, Ackermann did not recall his involvement in the approvals.


Response: Often, the effects of fiscal policy aren't felt equally by everyone. Depending on the political orientations and goals of the policymakers, a tax cut could affect only the middle class, which is typically the largest economic group. In times of economic decline and rising taxation, this same group may have to pay more taxes than the wealthier upper class.Similarly, when a government decides to adjust its spending, its policy may affect only a specific group of people. A decision to build a new bridge, for example, will give work and more income to hundreds of construction workers. A decision to spend money on building a new space shuttle, on the other hand, benefits only a small, specialized pool of experts and firms, which would not do much to increase aggregate employment levels.


When Should I Use the Basic Accounting Equation?

Response: The basic accounting equation is used to provide a simple calculation of a company's value, based on a comparison of equity and liabilities. For a more specific breakdown of the components of equity, use the expanded equation instead.


Response: The U.S. Treasury yield curve refers to a line chart that depicts the yields of short-term Treasury bills compared to the yields of long-term Treasury notes and bonds. The chart shows the relationship between the interest rates and the maturities of U.S. Treasury fixed-income securities. The Treasury yield curve is also called the term structure of interest rates.


Is Getting Terminated the Same as Getting Fired?

Response: You are terminated from your employment if you are fired. The reason for your termination depends and your employer should let you know why they let you go. You may be fired for misconduct, poor performance, or because you're not a good fit for the position or company.


What Is Considered a Good Return on an Investment?

Response: A good return on investment is generally considered to be about 7% per year, which is also the average annual return of the S&P 500, adjusting for inflation.


Response: Quasi-public goods have elements of both public and private goods. A public bridge is available to all but loses some of its value when it becomes congested during rush hour. A public museum is open to all, and may even receive some public funds, but it may still charge an entrance fee to adequately finance its operation.


What Is the Importance of Enterprise Resource Planning?

Response: Enterprise resource planning software offers single-system solutions that integrate processes across the business. These applications allow users to interact within a single interface, share information, and enable cross-functional collaboration. They increase productivity, collaboration, and efficiency.


How can an individual invest in a special purpose acquisition company (SPAC)?

Response: Most retail investors cannot invest in promising privately held companies. However, SPACs are a way for public investors to now partner with investment professionals and venture capital firms. Exchange-traded funds (ETFs) that invest in SPACs have emerged, and these funds typically include some mix of companies that recently went public by merging with a SPAC and SPACs that are still searching for a target to take public. As with all investments, depending on the specific details of a SPAC investment, there will be different levels of risk.


What Is the Downside to Closed-End Funds?

Response: One of the significant downsides to closed-end funds is that no new shares are issued. So, to gain access to a closed-end fund, you'd have to find someone willing to sell shares at a premium or wait until some open up on the market.


What Is the Difference Between Hindsight Bias and Confirmation Bias?

Response: Confirmation bias is when you look for information to support your beliefs, while hindsight bias is the belief that you predicted an event in the past.


Response: Creditors are individuals or entities that have lent money to another individual or entity. They typically charge interest and the money is owed back to them. For example, a bank lending money to a person to purchase a house is a creditor. A debtor is an individual or entity that borrows money from another individual or entity and needs to pay that money back within a certain time frame, with interest. For example, a person who borrows money from a bank to buy a house is a debtor.


What Is Interpolation vs. Extrapolation?

Response: Interpolation estimates unknown values that fall between two or more known data points, filling in the blanks. Extrapolation instead extends known data points outward.


What Are the Benefits of Money Market Accounts?

Response: Some of the benefits of MMAs include higher interest rates, insurance protection, check-writing, and debit card privileges. The lure of higher interest rates than savings accounts is one of the main attractions of MMAs. They are able to offer higher interest rates because they're permitted to invest in certificates of deposit, government securities, and commercial paper, which savings accounts cannot do. These accounts also offer easy access to funds as well as the flexibility to transfer funds between multiple accounts at the same institution. And unlike savings accounts, many MMAs offer some check-writing privileges and also provide a debit card with the account, much like a regular checking account.


Response: Contango can be caused by several factors, including inflation expectations, expected future supply disruptions, and the carrying costs of the commodity in question. Some investors will seek to profit from contango by exploiting arbitrage opportunities between the futures and spot prices.


What Is the Federal Trade Commission Act of 1914?

Response: The Federal Trade Commissions Act of 1914 created the Federal Trade Commission (FTC) and bestowed full power to the U.S. government to address unscrupulous acts among businesses.


Response: Form W-8BEN is sent by the company making payments to the individual. The form should be returned to the company or entity that sent the form W-8BEN, not the IRS. It's also not meant to be filed with a tax return. Typically, the form should be submitted before the first payment is made.


What Are Some Examples of Stock Tickers?

Response: Here are some examples of popular ticker symbols:Apple Inc. (AAPL)Alphabet Inc. (GOOGL)Microsoft Corporation (MSFT)Amazon.com, Inc. (AMZN)Meta (formerly Facebook) Inc. (META)Tesla Motors (TSLA)The Goldman Sachs Group, Inc. (GS)The Dow Jones Industrial Average (DJIA)The S&P 500 Index (SPX)The NASDAQ Composite Index (COMP)


How do government spending and monetary policy affect a currency’s value?

Response: When governments spend, implement policies that keep taxes low, subsidize the price of staple goods, or use other methods that effectively put more money in people’s pockets, consumers have more money to spend. As most economies rely at least partly on imports for many goods and services, this increased spending creates demand for foreign currency (usually U.S. dollars), as importers have to sell local currency and buy foreign currency to pay for imports.Demand for foreign currency (and selling of local currency to buy it) increases exponentially when those policies also promote heavy investment in infrastructure, new businesses, and other economic projects. As more local currency is offered for sale on foreign exchange markets, its value goes down, unless there is a corresponding demand to buy it (say, by exporters selling foreign currency that they earn from exports).


Response: The Federal Open Market Committee of the Federal Reserve meets eight times a year to determine changes to the nation's monetary policies. The Federal Reserve may also act in an emergency as was evident during the 2007-2008 economic crisis and the COVID-19 pandemic.


Response: Common short-term investment vehicles include six-month CDs, money market accounts, high-yield savings accounts, government bonds, and Treasury bills.


What Are the Steps to Take in the Tender Process?

Response: The tender process steps generally include the call for submissions, the bid submission, the selection process, and the formation of the contract. Once these steps are all complete, the contractor starts the project and sees it through completion.


Response: Compound interest benefits investors across the spectrum. Banks benefit from compound interest lending money and reinvesting interest received into additional loans. Depositors benefit from compound interest receiving interest on their bank accounts, bonds, or other investments.


What's a Major Challenge When Buying Green Bonds?

Response: When buying green bonds, you might have several challenges. Transparency and reporting can create a bit of homework, as you'll want detailed information about the use of proceeds and the environmental impact of funded projects. Also, the green bond market is still developing, and some bonds may have lower liquidity than traditional ones, making it harder to buy or sell at desired prices and times. The lack of a universal standard in the green bond market can create confusion about what qualifies as a green bond, and there are no binding regulations for the nongovernmental standards often used.


What's the Difference Between Tier 1 and Tier 2 Capital?

Response: Tier 1 capital refers to a financial institution's core capital. This is the capital it requires to run its day-to-day operations. Tier 2 capital is any additional capital that it holds in its reserves. Both tiers include different assets that are held by banks. While tier 1 capital includes shareholders' equity and retained earnings, tier 2 capital is comprised of funds that don't appear on a bank's financial statements, subordinated term debt, and hybrid capital instruments among other things.


Response: An NDA template is a template of a non-disclosure agreement that an individual or company can follow to create their own NDA. The template will have the general legal information and blanks that can be filled in to create a unique NDA between two or more parties that apply to their relationship.NDA templates are easily found online through an Internet search. Many sites offer NDA templates for use.


What Information Does a Derivative Contract Include?

Response: Generally, a contract will detail such things as the asset involved, the dollar value or amount (e.g., face amount or lot size) of the security, the settlement date and process, trading hours, price quotation, and the contract expiration date.


Response: Cryptocurrencies are a new paradigm for money. They promise to streamline existing financial architecture to make it faster and cheaper. In addition, their technology and architecture decentralize existing monetary systems and make it possible for transacting parties to exchange value and money independently of intermediary institutions such as banks.


Response: The Franchise Tax Board is usually a state-operated tax agency for both personal and business taxes.


Why Is Sampling Used to Gather Population Data?

Response: Sampling is a way to gather and analyze information about a larger group. It is done because researchers aren't able to study entire populations due to the sheer volume of subjects involved. As such, not everyone in the larger group can be included as it may take too long to study and analyze the data. It allows entities like governments and businesses to make important decisions about the future, whether that means investing in an infrastructure project, social service program, or new product.


Response: Cottage industries are generally not scalable by definition. That is, if they scale up, they are no longer cottage industries.The definition of success is different. Most cottage industries are intended to provide a decent income for a single individual or family.There is the occasional breakout star, like Burt's Bees, which got its start when a fed-up photojournalist decided to move to rural Maine and become a beekeeper. But even Burt needed a partner with bigger ambitions.


Response: A widow's exemption is a tax deduction offered after your spouse dies.


Response: In Latin per capita means "by heads" or "for each head".


How Do You Calculate the Value of Sweat Equity in a Business?

Response: New businesses generally determine their valuation based on the sale of equity capital. For example, if an investor provides $1 million for a 20% equity stake, the company would be worth $5 million. Valuing a company can be more complicated without equity funding, in which case accountants will use the company's existing assets, brands, and the value of similar companies to estimate the total value of a company's equity.


Response: If the underwriting bank or investment banking syndicate cannot or do not want to back stop a new issue, third-party backstop purchasers may be called upon to step in and buy any unsubscribed portion of a securities issue. These purchasers may provide a bid substantially below the issue price and/or may demand fees as compensation. They would then often try to sell off the holdings over time at a profit.


Response: A whitewash resolution is commonly used by financially distressed companies that want to avoid becoming insolvent. Instead, they seek out a buyer that ensures that promises its shareholders it will remain financially viable for at least 12 months after it gives the acquirer financing. Doing so allows the target to pay off its debts rather than having its assets and finances being exploited by the acquirer.


Response: Depending on the type of life insurance policy and how it is used, permanent or variable life insurance could be considered a financial asset because it can build cash value or be converted into cash. Simply put, most permanent life insurance policies have the ability to build cash value over time.


What Is a Single Life Settlement Option?

Response: In a single life settlement, any payments agreed upon will cease upon the death of the annuitant or beneficiary. In contrast, a joint life settlement will continue paying out until the annuitant's spouse also passes away (assuming they survive the annuitant).


How Does a Command Economy Differ From a Free-Market Economy?

Response: In a free-market economy, private enterprises determine their levels of production in response to the law of supply and demand.In a command economy, the decision is dictated by government.Few free-market economies today operate entirely on the principle of laissez-faire. A government may use public policies and regulations to encourage the production of a product, such as fuel-efficient cars.And some command economies have loosened their control. China's economic boom did not begin until it created its own blend of socialist ideology and capitalist enterprise.


Are Binary Options Considered High Risk?

Response: Binary options are considered high-risk because of their all-or-nothing payouts, their short-term speculative nature, their volatility, and the leverage involved in the product.Approach binary options with caution, fully understanding the risks involved, and have a trading strategy with risk management measures in place. Using a regulated and reputable broker to mitigate some of these risks is essential.


What Is Permanent Policy Life Insurance?

Response: Permanent life insurance is a life insurance policy that doesn't expire until the death of the policy holder. It usually comes with a cash value savings component.


How Old Is the Kelley School of Business at Indiana University?

Response: Indiana University's business school is more than 100 years old. It was established in 1920 as the School of Commerce and Finance but later grew to become the Kelley School of Business.


How Do I Report Form 1099-R on Form 1041?

Response: Form 1041 is used to report income taxes for an estate or trust. In the event that a death benefit or retirement distribution is paid out to a trust or estate, this income is recorded on Line 8: Other Income. In addition, a copy of the form 1099-R should be attached to the 1041 that it is being applied to.


What Is an Example of a Leading Indicator?

Response: One of the most famous examples is the Consumer Confidence Index (CCI). This is a survey regularly performed by The Conference Board to determine how optimistic or pessimistic consumers are about their expected future financial situation.


What Is the Difference Between Foreign Direct Investment and Foreign Portfolio Investment?

Response: Foreign portfolio investment is the addition of international assets to the portfolio of a company, an institutional investor such as a pension fund, or an individual investor. It is a form of portfolio diversification, achieved by purchasing the stocks or bonds of a foreign company. Foreign direct investment instead requires a substantial and direct investment in, or the outright acquisition of, a company based in another country, and not just their securities.FDI is generally a larger commitment, made to enhance the growth of a company. But both FPI and FDI are generally welcome, particularly in emerging nations. Notably, FDI involves a greater responsibility to meet the regulations of the country that hosts the company receiving the investment.


Response: As the S&P 500 is an index, you cannot invest directly in it. You can, however, invest in funds that track the index, such as the SPDR S&P 500 ETF. When you invest in these funds, they pay out the dividends to you.


Should I be concerned that I’ve been flagged as a pattern day trader?

Response: Not necessarily, but you will face certain account restrictions or requirements. Under Financial Industry Regulatory Authority (FINRA) rules, customers designated “pattern day traders” by their broker must have at least $25,000 in their accounts and can only trade in margin accounts. If the account falls below that requirement, then the pattern day trader will not be permitted to day trade until the account is restored to the $25,000 minimum equity level. The margin rule applies to day trading in any security, including options.


What Assets Can Use the Half-Year Convention?

Response: The half-year convention can be applied to all property except residential rental property, nonresidential real property, railroad gradings, and tunnel bores, unless the mid-quarter convention applies.


How do I annualize my income for the annualized income installment method?

Response: Unlike our scenario above, in real life, you will not already know your full annual tax payment when your quarterly estimated tax payment is due. Instead, you will have to estimate your annual tax payment by annualizing your income from the beginning of the year until the end of the period in which you are paying taxes. Because the "quarters" do not always fall on actual calendar quarters, year-to-date (YTD) income through May 31 is annualized by multiplying by 2.4, through Aug. 31 YTD by 1.5, and through Dec. 31 YTD by 1.


What Does %K Represent on the Stochastic Oscillator?

Response: On a stochastic oscillator chart, %K represents the current price of the security, represented as a percentage of the difference between its highest and lowest values over a certain time period. In other words, K represents the current price in relation to the asset's recent price range.


How Can Companies Overcome the Challenge of the Law of Large Numbers?

Response: Companies often strive to overcome the challenge of the law of large numbers by acquiring smaller growth companies that can infuse scalable growth. They also attempt to become more efficient and utilize their size for manufacturing, ordering, or distribution benefits. Last, companies can be more attentive to dollar goals as opposed to percent goals.


What Is the Difference Between Child Tax Credit and Additional Child Tax Credit?

Response: The Child Tax Credit is a non-refundable tax credit that may reduce the tax liability of certain taxpayers down to $0. The Additional Child Tax Credit is a refundable credit that returns a portion of the unused credit amount up to a set limit indexed to inflation.


What Is an Example of a Capital Budgeting Decision?

Response: Capital budgeting decisions are often associated with choosing to undertake a new project that will expand a company's current operations. Opening a new store location, for example, would be one such decision for a fast-food chain or clothing retailer.


How Does Expansionary Policy Affect Inflation?

Response: Expansionary policy often has the unintended consequence of creating (or increasing) inflation. The Federal Reserve usually has to choose between combatting unemployment and inflation; any policies set forth to battle one usually increases the other. This is because expansionary policy usually means people have more money at their disposal. Due to greater demand for products, more consumers are able to purchase goods at higher prices.


Why Is Unlevered Free Cash Flow Preferred in Discounted Cash Flows (DCF) Analysis?

Response: Because debt and financing charges are not included in UFCF, it provides a more accurate picture of a company's enterprise value (EV), a measure of a company's total value viewed as a more comprehensive alternative to equity market capitalization. This makes it easier to conduct discounted cash flow analysis (DCF) across different investments in order to make like comparisons.


Response: Jan Tinbergen was a Dutch economist who won the Nobel Prize in economic sciences. His contributions of dynamic models to economic processes greatly expanded the understanding of economic policy as a tool.


Response: In general, the rules for recording accruals are the same as the rules for recording other transactions in double-entry accounting. The specific journal entries will depend on the individual circumstances of each transaction.


Response: NAFTA aimed to create a free trade zone between the U.S., Canada, and Mexico. Its goal was to make doing business in Mexico and Canada less expensive for U.S. companies (and vice versa), and to reduce the red tape needed to import or export goods.


Can I Have Two Mortgages at the Same Time?

Response: It's possible to have two mortgages at the same time. A first mortgage can go toward purchasing a home, either as a primary residence or as an investment property. A second mortgage or home equity loan can go toward making upgrades or improvements to the property.


Response: BDCs make money by lending capital to and purchasing equity or bonds from the companies in their portfolio.


How Are Current Assets Different From Fixed (Noncurrent) Assets?

Response: In accounting, assets are categorized by their time horizon of use. Current assets are expected to be sold or used within one year. Fixed assets, also known as noncurrent assets, are expected to be in use for longer than one year. Fixed assets are not easily liquidated. As a result, unlike current assets, fixed assets undergo depreciation.


How Do You Ensure a Representative Sample?

Response: In order to ensure that their are sampling an accurate cross-section of the population, researchers will sometimes use systematic or stratified sampling methods to ensure that the sample resembles the known features of the population. For example, if the subject population is 55% male and 45% female, they will deliberately choose a sample that is 55% male. Note that this method requires the researchers to have a certain level of certainty about the population being sampled.


Response: The three main consumer goods categories are durable goods, nondurable goods, and services. Durable goods, such as furniture or cars, last at least three years. Often, economists will watch durable goods spending to track the economy's health. Nondurable goods are items with a shelf life of under three years and are consumed rapidly. Fast-moving consumer goods fall within this category. Finally, services include intangible services or products, such as haircuts or car washes.


Response: Buying and selling the option make the collar costless, although additional fees and costs might be associated with the trade.


Response: Raw materials in food can be standalone items like meats, milk, fruits, and vegetables. They can also refer to the ingredients that go into a food item or recipe. For instance, milk is a raw material used in the production of cheese and yogurt.


Response: The U.S. government (and ultimately the nation's taxpayers). Most student loan lenders are huge institutions, such as commercial banks or the government (specifically, the Department of Education). Until 2010, student loans were usually originated by a private lender but guaranteed by the government. The Health Care and Education Reconciliation Act of 2010 ended the practice, replacing such guarantees with direct lending from the federal government.


Why Would an Investor Make a Short Sale Transaction?

Response: The two most common reasons an investor might want to short sell a security are:To hedge another investmentTo profit from a predicted price decline


What Happens If a Borrower Breaks a Negative Pledge Clause?

Response: The loan agreement will specify the type of recourse that is available to a lender if the borrower sells or otherwise encumbers property protected by a negative pledge clause. This will usually allow the lender to sue the borrower, or accelerate the loan's repayment schedule. However, the lender cannot pursue action against any third party, only the borrower.


What Are the Benefits of USDA Streamlined Refinancing?

Response: Streamlined refinancing offers a hassle-free way to refinance a USDA mortgage. The main benefit is lower loan payments.


What Happens If the Appraisal Comes in Too Low?

Response: If a home appraisal comes in below what the buyer has agreed to pay, there are several options they could choose from. The first is to ask the seller to renegotiate the home's price so that it aligns with the home's appraisal value. The next option is to pay the difference between the appraisal value and the asking price out of pocket. Buyers could also use a piggyback mortgage to make up the difference between the home's value and its sales price.


How Does Material Participation Impact Taxes?

Response: A taxpayer who is materially participating in an activity is allowed to deduct the total amount of losses on their taxes. Under passive activity rules, a taxpayer who is passively participating in an income-generating activity is limited in the deductibility of losses.


Response: Supply shocks can be either temporary, such as those caused by the global financial crisis of 2009, or permanent, such as the introduction of fracking technology, which resulted in the U.S. becoming a net energy exporter in 2019, the first time this had happened since 1952. According to the World Bank in 2020, permanent shocks accounted for 47% of price variability, with temporary ones mounting up to 53%.


Response: A company's equity multiplier varies if the value of its assets changes, and/or if the level of liabilities changes. If assets increase while liabilities decrease, the equity multiplier becomes smaller. That's because it uses less debt and more shareholders' equity to finance its assets.


Is Operating Income the Same As Profits?

Response: Not exactly. Operating income is what is left over after a company subtracts the cost of goods sold (COGS) and other operating expenses from the sales revenues it receives. However, it does not take into consideration taxes, interest or financing charges.


Who sets accounting principles and standards?

Response: Various bodies are responsible for setting accounting standards. In the United States, generally accepted accounting principles (GAAP) are regulated by the Financial Accounting Standards Board (FASB). In Europe and elsewhere, International Financial Reporting Standards (IFRS) are established by the International Accounting Standards Board (IASB).


Response: The secondary market is where securities are traded after they go through the primary market. It is a key part of the financial system, providing liquidity to the market. It also allows traders with a centralized location where they can make trades. Investors who deal with large and small volumes of trades have the ability to participate in the market.


Response: A unilateral contract is a one-sided agreement in which the party making the offer agrees to pay only after the party that accepts the offer has completed a task. This differs from a bilateral contract in which both parties must abide by the agreement.


Response: Air Waybills are IATA documents signed by both the shipper and the carrier. The IATA is a trade association that represents more than 80% of all air traffic, including many major airlines and major parcel services such as FedEx and UPS.


What Are the Main Components of Lead Time?

Response: The main factors that make up lead time are preprocessing, processing, waiting, storage, transportation, and inspection. The factors are often compiled into the three main stages of an order: the before (pre-processing), the during (processing), and the after (shipping).


Does a Gentlemen's Agreement Stand Up In Court?

Response: A gentleman's agreement can be enforceable when it meets the criteria of an "oral contract, although some types of contracts, such as for a real estate transaction, must always be in writing.


Response: Investing business activities are those that are capitalized over more than one year and usually appear as the second section of the cash flow statement. The purchase of long-term assets is recorded as a use of cash in this section. Likewise, the sale of real estate is shown as a source of cash. The line item "capital expenditures" is considered an investing activity and can be found in this section of the cash flow statement.


Response: Some foreign aid is considered to be a unilateral transfer, such as when the U.S. or another nation provides humanitarian support to a nation without expectation of anything in return. But some forms of foreign aid are bilateral, such as when a country provides military aid in exchange for certain agreements of cooperation or allyship.


Response: A brand is a product or service that has a unique and immediately recognizable identity that distinguishes itself from others in its industry. The consumer associates the product name, label, and packaging with particular attributes such as value, quality, or tastefulness.A cough drop is just a cough drop. But when you go to buy a bag of them, you choose Ricola, Luden's, or Beekeeper's Naturals at least in part based on the brand message that you have received.


Response: Reporting company is essentially another name for a public company. These companies must meet the same reporting requirements with the SEC as public companies. A reporting company does not necessarily have to undergo an IPO, however. It can register its class of securities with the SEC instead.


Why Is Organizational Behavior Important?

Response: Organizational behavior describes how people interact with one another inside of an organization, such as a business. These interactions subsequently influence how the organization itself behaves and how well it performs. For businesses, organizational behavior is used to streamline efficiency, improve productivity, and spark innovation to give firms a competitive edge.


What Is the Difference Between Mudarabah and Musharakah?

Response: Musharakah is a type of joint partnership in which all partners participate in both the investment and the profits. Profits are shared proportionately based on the size of each partner's investment. Mudarabah is another type of Islamic financing structure in which one partner provides the capital investment and the other provides labor or expertise. Profits are then shared according to a ratio that has been agreed on in advance.


How can you protect your level death benefit policy against inflation?

Response: Over time, rising inflation rates will slowly reduce the real value of the death benefit for a level death benefit policy. Many carriers offer options available to counteract inflation, including buying inflation protection riders and planned face-amount increases.


Response: The opposite of a free market is a planned economy or a command economy. In such an economic system, the government controls most or all of the means of production and distribution of wealth. The government may also dictate prices of goods, services, and labor.


Response: Positive pay is a check fraud prevention tool. Checks are matched and cross-referenced with a list provided by the client, including the date, check number, dollar amount, and account number. Any suspicious items are verified with the client.


What Is the Difference Between a Primary and Secondary Beneficiary?

Response: The primary beneficiary is the first named to receive benefits as stated in a will. If the primary either can't or is unwilling to accepts the assets, the secondary beneficiary, also called the contingent beneficiary, would be next to receive assets.


Response: Shareholders have the right to inspect the company’s books and records, the power to sue the corporation for the misdeeds of its directors and/or officers, and the right to vote on critical corporate matters, such as naming board directors. In addition, they have the right to decide whether or not to green-light potential mergers, the right to receive dividends, the right to attend annual meetings, the right to vote on crucial matters by proxy, and the right to claim a proportionate allocation of proceeds if a company liquidates its assets.


How Do You List an Honors Degree on a Resume?

Response: An honors degree is often listed directly after your degree, separated by a comma. If you include your major or field of study, it could come after that: B.A. in History, magna cum laude. If it is a Latin title, like summa cum laude, the honors degree should be in lowercase letters and italics.


How Does a Correspondent Bank Add Value?

Response: In transactions that require their use, the correspondent bank adds value in two ways. It alleviates the need for the domestic bank to establish a physical presence abroad and saves the work of setting up direct arrangements with other financial institutions around the world.


Response: Contrary to net income, other comprehensive income is income (gains and losses) not yet realized. It reflects income that cannot be accounted for by the income statement. Some examples of other comprehensive income are foreign currency hedge gains and losses, cash flow hedge gains and losses, and unrealized gains and losses for securities that are available for sale.


How Do I Pick the Number of Periods for a Donchian Channel?

Response: Selecting the right number of periods for Donchian channels is crucial and should match your trading strategy, your trading horizon, and the market’s volatility. Fewer periods will be more responsive to price moves, which is better for short-term trading. A higher number of periods gives you a wider overview of market trends, which is better for long-term trading strategies. You should also consider the asset or market involved, the range in price for the market or asset over time, and your risk tolerance when setting the number of periods.


Response: Examples of common tax deductions include mortgage interest, contributions towards retirement plans, student loan interest, charitable contributions, certain health expenses, gambling losses, and HSA contributions.


Response: A statutory lien is a type of lien that is based on legal statutes rather than common law or a contractual agreement. Two common examples are mechanic's liens and tax liens.


Is It Better to Pay Out-of-Pocket or Use Health Insurance?

Response: It is tempting to get a high-deductible plan, choosing to pay out-of-pocket for routine healthcare in return for lower monthly premiums.That can work if you don't have considerable medical expenses. It could get expensive if you unexpectedly need substantial medical care.


Response: An impact-investing firm is an investment fund that specifically seeks to support beneficial social or environmental outcomes, in addition to generating financial returns. Some impact funds invest in causes that they believe will generate strong returns; others consider profits to be a secondary consideration.


How Does a Brokerage Account Differ From a Bank Account?

Response: Brokerage accounts hold securities such as stocks, bonds, and mutual funds and some cash. A bank account only holds cash deposits. A bank account lets you write checks and use a debit card. Some brokerage accounts also provide a debit card and allow you to write checks. Many bank accounts are FDIC-insured for up to $250,000. Brokerage accounts usually have SIPC protection, which can help recover some value of such accounts if a brokerage goes under.


Response: A point of inflection is the location where a curve changes from sloping up or down to sloping down or up; also known as concave upward or concave downward. Points of inflection are studied in calculus and geometry. In business, the point of inflection is the turning point of a business due to a significant change. This turning point can be positive or negative.


Response: There are two inherent rights associated with being a bondholder. The first is to be repaid the full principal amount once the bond matures. The second is for the bond issuer to pay the bondholder interest at the agreed-upon interval, whether that's annually, quarterly, or another period.


Does random walk theory apply only to stocks?

Response: No. While it is most commonly applied to the stock market, it can also be applied to other financial markets such as the bond, forex, and commodities markets, among others.


How Does the Federal Reserve Use Reverse Repos?

Response: When the Federal Reserve uses a reverse repo, the central bank initially sells securities and agrees to buy them back later. In these cases, the Fed borrows money from the market, which it may do when there is too much liquidity in the system. Regular repurchase agreements (repos), in which the Fed plays the role of the lender by buying securities and then selling them back, are a more common central bank measure to inject additional reserve balances into the banking system. The Fed is not the only central bank to use this liquidity-maintaining method. The Reserve Bank of India also uses repos and reverse repos as they work to stabilize the economy through the liquidity adjustment facility.


What Are the Various Professional Designations for Financial Professionals?

Response: There are more than 200 designations available to financial professionals, but a few of the most common acronyms are enough for most of us:Certified financial planner (CEP) is a formal designation awarded by the Certified Financial Planner Board of Standards to professionals who pass its initial exams and participate in its annual ongoing educational programs. Professionals who have this credential can advise individuals on a broad range of financial issues from budgeting to long-term savings and investing.Certified public accountant (CPA) is a license awarded by a state's Board of Accountancy after the applicant passes a rigorous examination. Not all accountants are CPAs, and CPAs often wind up in executive positions.Chartered financial analyst (CFA) is a professional designation given by the CFA Institute, which certifies the competence and integrity of financial analysts. CFAs are candidates for positions as portfolio managers or investment analysts.Chartered financial consultant (ChFC) has completed a study program offered by the American College of Financial Services. The designation indicates the person's ability to offer advice on the full range of financial issues. It is similar to the CFP designation, and opinions vary on which credential is better.


Response: Net of tax is what remains after all taxes have been subtracted from your gross pay or income.


Response: Yes, provided your brokerage authorizes you to do so. You'll first want to make sure you clearly understand how after-hours trading works and the risks involved in it. Your brokerage may ask that you meet with a investment representative to make sure you know the difficulties posed by after-hours and premarket trading.


Response: The primary benefit of designating a beneficiary for a bank account such as savings or a CD is to avoid a probate court deciding how to distribute the proceeds to any heirs in the event of the death of the account holder. Probate court incurs costs that must be paid by the estate of the deceased and often dilute the value of any financial assets that otherwise might be passed to beneficiaries.


How Often Should Engagement Letters Be Updated?

Response: To play it safe, companies generally require their engagement letter to be updated and signed on an annual basis. A new one should always be issued if the scope of services changes. However, even if the agreement remains the same, it can still be wise to redraft an engagement letter to increase the legal standing of the document.


Response: Cash surrender value applies to the savings element of whole life insurance policies. This value is payable before death.Overall, it’s the accumulated portion of a permanent life insurance policy’s cash value that is available to the policyholder upon surrender of the policy. Depending on the age of the policy, the cash surrender value could be less than the actual cash value.


What's the Difference Between a Token Warrant and an SAFT?

Response: A warrant is an investing instrument that gives the purchaser the right but not the obligation to purchase an underlying asset from the issuer at a specific price and date. A token warrant is an instrument that gives the purchaser the right (but no obligation) to purchase cryptocurrency at a specified date and price from the issuer.


What Are Some Factors That Impact the Current Account?

Response: A country's trade balance (exports minus imports) is generally the biggest determinant of whether the current account is a surplus or a deficit. During an economic expansion, import volumes typically increase, creating a current account deficit. However, during a recession, the current account will be a surplus if imports decline and exports increase. Exchange rates are another variable that can impact the current account.


How Does Income Elasticity of Demand Differ From Price Elasticity of Demand?

Response: Price elasticity of demand measures the change in percentage of demand caused by a percent change in price, rather than a percent change in income.


Response: WorldCom was a telecommunications company that provided discount long-distance services to its customers. The company was embroiled in one of the largest accounting scandals in the United States, which led to an equally large bankruptcy filing. The company used questionable accounting practices to cover up its losses by making itself look more profitable than it was. Several individuals were concerned about fraudulent financial transactions and reported the inconsistencies to authorities. Its bankruptcy helped the company restructure, rebranding itself as MCI. This new entity was sold to Verizon in 2006.