Response: A margin call is a scenario in which a broker who had previously extended a margin loan to an investor sends a notice to that investor asking them to increase the amount of collateral in their margin account. When faced with a margin call, investors often need to deposit additional cash into their account, sometimes by selling other securities. If the investor refuses to do so, the broker has the right to forcefully sell the investor’s positions in order to raise the necessary funds. Many investors fear margin calls because they can force investors to sell positions at unfavorable prices.


How Is the Efficient Frontier Constructed?

Response: The efficient frontier rates portfolios on a  coordinate plane. Plotted on the x-axis is the risk, while return is plotted on the y-axis—annualized standard deviation is typically used to measure risk, while compound annual growth rate (CAGR) is used for return.


How Are Ethics and Supply Chain Management Related?

Response: Ethics has become an increasingly important aspect of supply chain management, so much so that a set of principles called supply chain ethics was born. Many investors today want to know how companies produce their products, treat their workforce, and protect the environment. As a result, companies respond by instituting measures to reduce waste, improve working conditions, and lessen their impact on the environment—all of which can involve SCM.


What Are Some Examples of Accounting Policies?

Response: Accounting policies appear in a business when accounting principles allow leeway in how the rules are applied to a situation. Situations that involve management discretion include:Valuation of inventoryValuation of investmentsValuation of fixed assetsDepreciation methodsCosts of R&DTranslation of foreign currency


What Fees and Charges Are Associated with Demand Drafts?

Response: Fees associated with demand drafts include an issuance fee charged by the bank for providing the draft. Additionally, there may be additional charges for services like courier delivery if the draft needs to be sent to the payee through postal services or courier. The fees can vary between banks, so check with your bank for the specific charges.


Response: In survey research, sampling errors occur because all samples are representative samples: a smaller group that stands in for the whole of your research population. It's impossible to survey the entire group of people you'd like to reach.It’s not usually possible to quantify the degree of sampling error in a study since it's impossible to collect the relevant data from the entire population you are studying. This is why researchers collect representative samples (and representative samples are the reason why there are sampling errors).


Can Merchants Charge Extra for Using a Credit Card?

Response: In most states in the U.S., merchants are allowed to charge customers extra for using a card rather than cash, in effect covering some or all of the merchant discount rate they have to pay on the transaction. This is commonly known as a surcharge and is typically calculated as a percentage of the transaction amount. In some cases, merchants can also charge convenience fees, which are typically a flat amount.


Response: The income effect is a part of consumer choice theory—which relates preferences to consumption expenditures and consumer demand curves—that expresses how changes in relative market prices and incomes impact consumption patterns for consumer goods and services. In other words, it is the change in demand for a good or service caused by a change in a consumer's purchasing power resulting from a change in real income. This income change can be the result of a rise in wages etc., or because existing income is freed up by a decrease or increase in the price of a good that money is being spent on.


Response: Yes, a gift letter is legally binding. The information on the letter is used and relied upon by multiple parties, and both the donor and recipient are expected to be bound to the terms of the gift letter.


Response: A strong EBITDA is considered to be at least two times the company's interest expense. For example, if a company's annual interest expense is $1 million, then a strong EBITDA would be at least $2 million.In some industries, a higher EBITDA margin above 15% or more, may be considered favorable. A good EBITDA varies by industry, company size, industry norms, growth stage, and capital structure.


Who Went to Jail for the 2008 Financial Crisis?

Response: Although the 2008 financial crisis caused a public outcry, there was no reckoning for the bankers who were blamed for the crisis. Two managers at Bear Stearns hedge funds were arrested for misleading investors, but they were found not guilty. The only successful prosecution was of Kareem Serageldin, a Credit Suisse executive who was convicted of mismarking bond prices to hide the bank's losses.


What Are the Ways a Loan Can Be Modified?

Response: A modification can help you lower the interest rate, extend the loan term, switch from a variable rate to a fixed rate, and move missed payments to the end of the loan term. Any one of these actions could lower your monthly payment amount and make it easier to repay.


What Are the Standard Deduction Amounts for 2023 and 2024?

Response: For single taxpayers and those who are married but filing separately, the standard deduction is $13,850 in 2023 and $14,600 in 2024. For heads of households, the standard deduction is $20,800 in 2023 and $21,900 in 2024. For taxpayers who are married and filing jointly, the standard deduction is $27,700 in 2023 and $29,200 in 2024.


How Does Compounding Grow Your Principal?

Response: The principal amount of an investment can earn interest, but compounding is when the interest you earn is added back to the principal balance. Effectively, you're earning interest on your interest—compounding your return.


Response: Yes, because the old contract is invalidated or "extinguished" when the new contract is signed.


What does a 30% maintenance requirement mean?

Response: A maintenance requirement of 30% means an investor borrowing on margin must have at least 30% of the total market value of the securities in their margin account at all times.  So, if the securities that you borrowed money to buy are valued at $20,000, the maintenance requirement would be $6,000.


What Are Examples of Nations With an Absolute Advantage?

Response: A clear example of a nation with an absolute advantage is Saudi Arabia, a country with abundant oil supplies that provide it with an absolute advantage over other nations.Other examples include Colombia and its climate—ideally suited to growing coffee—and Zambia, possessing some of the world’s richest copper mines. For Saudi Arabia to try and grow coffee and Colombia to drill for oil would be an extremely costly and, likely, unproductive undertaking.


Response: On average, a home appraisal can cost anywhere from $300 to $450. The price may be higher for appraisals of multi-family homes or properties that are above average in size. The buyer is most often responsible for paying appraisal fees at the time the appraisal is ordered.


What Are the Main Functions of the World Trade Organization?

Response: The World Trade Organization (WTO) administers the trade agreements made among its member nations. It also mediates any trade disputes that arise.


Response: Many sustainable businesses seek to reduce their environmental footprint by using renewable energy or by reducing waste. Companies may also be more sustainable by promoting diversity and fairness in their workforce, or enacting policies that benefit the local community.


How Did Short Covering Contribute to the GameStop Short Squeeze?

Response: Retail traders noticed a high level of short interest in GameStop and worked together through Reddit trading group WallStreetBets to coordinate frenzied buying in the company’s shares and options. The increased sudden buying pressure forced several hedge funds who had bet against the videogame retailer to promptly cover their large short positions at a significant loss, creating a short squeeze in the stock. The short squeeze was exacerbated by several funds shorting more shares than the available float of shares in the market, making it difficult to cover all their short positions.


Do Loan Origination Fees Vary Depending on the Type of Loan?

Response: Yes, loan origination fees can vary depending on the type of loan and the lender's policies. Different loan programs such as conventional mortgages, FHA loans, VA loans, or jumbo loans may have different origination fee structures.


What Qualifies As an Institutional Investor?

Response: An institutional investor is an entity that makes investments on behalf of someone else. They gather insight and analytical data from Institutional Shareholder Services (ISS) providers that help them make informed shareholder decisions. Institutional investor examples include pension funds, mutual funds, insurance companies, university endowments, and sovereign wealth funds.


Can Pennant Formations Signal Both Continuation and Reversal Patterns?

Response: Pennant formations are primarily considered continuation patterns, signaling a brief pause before the resumption of the existing trend. However, in certain contexts, they may also act as reversal patterns.


Response: An annuity fund is an investment portfolio in which an annuity holder's payments are invested. It can contain stocks, bonds, and other securities. The annuity fund earns returns, which correlate to the payout that an annuity holder receives.


Response: Companies and industrial sectors that can be subject to windfall taxes are those with massive increases in profits, generally due to situations such as wartime, commodities shortages, and other situations and events that drive up prices. Individuals may also be taxed on windfalls, such as those from inheritances or lottery winnings.


How Do You Calculate the Return on an Investment?

Response: Knowing how to calculate the return on an investment (ROI) is crucial for evaluating your investment's performance. ROI gives you a quantitative measure of how well an investment is doing, taking into consideration either gains or losses.The most straightforward way to calculate ROI is using the following formula:ROI = (Final Investment Value - Initial Principal) / (Initial Principal) x 100Final Value of Investment: This is the value of the investment at the end of the period you are examining. It includes any profits made and dividends received and subtracts any losses or costs associated with the investment.Initial Principal: This is the original amount you invested.Multiplying by 100: This step converts the ROI into a percentage, making it easier to compare with other investments or rates of return.


What Is Sampling Error vs. Sampling Bias?

Response: In statistics, sampling means selecting the group that you will actually collect data from in your research.Sampling bias is the expectation, which is known in advance, that a sample won't be representative of the true population. For instance, if the sample ends up having proportionally more women or young people than the overall population.Sampling errors are statistical errors that arise when a sample does not represent the whole population once analyses have been undertaken.


Response: The purpose of a fund is to set aside a certain amount of money for a specific need. An emergency fund is used by individuals and families to use in times of emergency. Investment funds are used by investors to pool capital and generate a return. College funds are usually set up by parents to contribute money to a child's future college education.


Response: If you have old bearer bonds, you can reach out to the U.S. Treasury to redeem the bond. You will need to send the government the bond certificate and coupons via insured mail as well as your address for them to send you a check. You will also need to fill out IRS Form W-9.


Response: Businesses benefit from an OMS by streamlining the order fulfillment process. This can manage everything from point of sale to delivery. Ecommerce sellers can especially benefit from an OMS that can automate logistics, shipment, returns, and interface with platforms like Amazon, eBay, or AliExpress.


Response: If there is interest paid on reserves or excess reserves, it is a liability for the central bank because it owes money.


Response: Generally there are three deployment options for ERP systems; Cloud-based, on-premise, and a hybrid of the two. Within these options, a business can choose from hundreds of types such as finance, supply chain management, and human resource management.


What's the Difference Between Probability and Non-Probability Sampling?

Response: Probability sampling gives researchers the chance to come to stronger conclusions about the entire population that is being studied. It involves the use of random sampling, which means that all of the participants in the group are equally likely to get a chance to be chosen as a representative sample of the entire population. The result is often unbiased.Non-probability sampling, on the other hand, allows researchers to easily collect information. This type of sampling is generally biased as it is unknown which participants will be chosen as a sample.


What Are the Requirements to Get Additional Time on the Series 24 Exam?

Response: There is no information on the FINRA website regarding extra time for the Series 24 exam. However, it is designed and structured in a way that exam takers should have plenty of time to answer all the questions and return to ones that they missed or had reservations about.


Response: In finance, the margin is the collateral that an investor has to deposit with their broker or exchange to cover the credit risk the holder poses for the broker or the exchange. For example, a short position cannot be established without sufficient margin. In the case of short sales, under Regulation T, the Federal Reserve Board requires all short sale accounts to have 150% of the value of the short sale at the time the sale is initiated. The 150% consists of the full value of the short sale proceeds (100%), plus an additional margin requirement of 50% of the value of the short sale.


Response: There is no native coin for Hyperledger. It is a blockchain framework that puts the emphasis on creating enterprise-grade solutions rather than using or creating a particular coin or cryptocurrency.


What Is an Example of Goodwill on the Balance Sheet?

Response: Consider the case of a hypothetical investor who purchases a small consumer goods company that is very popular in their local town. Although the company only had net assets of $1 million, the investor agreed to pay $1.2 million for the company, resulting in $200,000 of goodwill being reflected in the balance sheet. In explaining this decision, the investor could point to the strong brand and consumer following of the company as a key justification for the goodwill that they paid. If, however, the value of that brand were to decline, then they may need to write off some or all of that goodwill in the future.


How Do I Find the Expected Value of a Stock That Doesn't Pay Dividends?

Response: For non-dividend stocks, analysts often use a multiples approach to come up with expected value. For example. the price-to-earnings (P/E) ratio is often used and compared to industry peers. So, if the tech industry has an average P/E of 25x, a tech stock's EV would be 25 times its earnings per share. This is again different than the statistical expected value presented in this article. However, it is another commonly used method for examining a stock's value.


What Are General and Administrative (G&A) Expenses?

Response: The G&A of SG&A may be called overhead expenses. A business has many expenses that are not directly related to making or selling a product. Office rent, utilities, and insurance are all costs of doing business. Departments like human resources and information technology support the company but do not take a direct role in product creation.


In Addition to Time Decay, When Do Options Traders Lose Money?

Response: Any trader making a directional bet on the underlying asset by buying options can still lose money if the underlying does not move in the desired direction quickly. For example, a bullish trader buys a call option with a strike price of $55 when the current price is $50. The trader will make money if the stock moves above $55 minus the premium paid, but it must do so before the option expires.


Response: Your homeowners or renters insurance may provide some protection for personal belongings, and airlines and cruise lines are responsible for loss and damage to your baggage during transport. Also, credit cards may provide automatic protection for things like delays and luggage or rental car accidents if used for deposits or other trip-related expenses.


Can Next of Kin Override a Power of Attorney?

Response: No. Next of kin or other family members do not have any legal authority to override or nullify an existing power of attorney.


Can Theta Be Positive, and What Would That Mean?

Response: Theta can appear positive, particularly when you’re short (or “writing”) an option. If you’ve sold an option, the passage of time works in your favor, making the option less valuable—which is good when you eventually buy it back at a lower price or let it expire worthless. In the case of selling options, while the theta of the option itself is still technically negative, the effect on your position is positive.


Response: Sharpe ratios above 1 are generally considered “good," offering excess returns relative to volatility. However, investors often compare the Sharpe ratio of a portfolio or fund with those of its peers or market sector. So a portfolio with a Sharpe ratio of 1 might be found lacking if most rivals have ratios above 1.2, for example. A good Sharpe ratio in one context might be just a so-so one, or worse, in another.


How Is a Business Write-Off Accounted for Under GAAP?

Response: Generally Accepted Accounting Principles (GAAP) detail the accounting entries required for a write-off. The two most common business accounting methods for write-offs include the direct write-off method and the allowance method. The entries used will usually vary depending on each individual scenario. Three of the most common scenarios for business write-offs include unpaid bank loans, unpaid receivables, and losses on stored inventory.


Response: A capital asset is an asset with future economic benefit often extending beyond one year. Companies and individuals hold capital assets for long-term benefit, and this group of assets is defined by the nature of its long-lasting value, its uniqueness in relation to not being part of a normal course of business, and its often higher dollar value.


What Are the Key Steps in Project Management?

Response: Project management can be broken down into five steps: initiation, planning, execution, monitoring, and closing. These obviously are broad steps, and a project manager's job is to apply them specifically to the project at hand in a way that is most efficient. How those steps are executed can vary depending on the type of project management being used.


How Can Management Preempt a Hostile Takeover?

Response: One of the ways to prevent hostile takeovers is to establish stocks with differential voting rights, like establishing a share class with fewer voting rights and a higher dividend. These shares become an attractive investment, making it harder to generate the votes needed for a hostile takeover, especially if management owns a majority of shares with more voting rights.


Should I Form a Limited Liability Company or a Sole Proprietorship?

Response: That depends on your business. A sole proprietorship is best suited to small businesses with low risk and low profits. Generally, these businesses don’t have a wide range of customers but rather a small, dedicated group. Sole proprietorships often start as hobbies that grow into a business.The reasons to start a limited liability company (LLC) are the opposite of the reasons above. The business entails some liability risks, has the potential for large profits and a large customer base, and is positioned to benefit from certain tax structures.


Response: Shareholders who buy or already own a company’s stock before the ex-dividend date will receive dividends on the date of payment. A company’s board of directors determines these dates.


Response: In the study of probability theory, the central limit theorem (CLT) states that the distribution of sample approximates a normal distribution (also known as a “bell curve”) as the sample size becomes larger, assuming that all samples are identical in size, and regardless of the population distribution shape. Sample sizes equal to or greater than 30 are considered sufficient for the CLT to predict the characteristics of a population accurately. The z-test's fidelity relies on the CLT holding.


Response: Yes, you can retake the GRE. There is no strict limit on how many times you can take the test, but there is a waiting period of 21 days between attempts. You can take the GRE up to five times within any continuous rolling 12-month period.


Response: You might consider travel insurance if you can't afford to cancel and then rebook an expensive or long trip. You might also consider travel health insurance if your health insurance doesn't cover international costs. An alternative is to book an easily cancellable vacation—look for a pay-later hotel room and car rental options, flexible cancellation terms, and the ability to rebook without a fee.


Response: Creditworthiness is very important when you are applying for loans because your creditworthiness determines whether you are approved for the loan and under what terms. The better your credit score and credit history, the better terms you can get on a loan, which means you can save money in the long term.


What Does a Price-to-Book (P/B) Ratio of 1.0 Mean?

Response: A P/B ratio of 1.0 indicates that the market price of a company’s shares is exactly equal to its book value. For value investors, this may signal a good buy since the market price of a company generally carries some premium over book value.


Response: Underinsurance basically refers to a person having insurance coverage but with a policy that won’t pay out enough to cover the full expenses incurred when filing a claim. For example, if Roy has his house insured for $200,000, but the cost to repair it in the event of a bout of bad weather would be at least $300,000, then he is underinsured—in this case, by $100,000.


What Is an Example of a Knock-in Option?

Response: An example of a knock-in option would be buying one to purchase a company's share for a strike price of $40 with a knock-in price of $50. If the price of the stock does not hit $50, then no option exists. If the price hits $50 then the option is "activated," which creates a regular option with a $40 strike price.


Does a Lease-to-Own Agreement Help Build Your Credit?

Response: Lease-to-own agreements are typically not reported to credit bureaus, according to Experian, making them unlikely to appear on your credit report. However, you can always ask your landlord to report your rent payments, thereby helping to raise your credit score. Of course, that cuts both ways—a missed or late payment could end up reducing your credit.


Response: A bank account number is usually eight to 12 digits long, but some account numbers have up to 17 digits. Note that this is not the same as your debit card number or credit card number.


How Does Duration Impact a Roll-Down Return Strategy?

Response: Duration plays a significant role in the effectiveness of a roll-down return strategy by impacting the sensitivity of a bond's price to changes in interest rates. Duration influences the bond's price sensitivity and, thus, the potential for capital gains. Investors should ensure their duration exposure aligns with their expectations for interest rates and risk tolerance.


Response: A loan is considered jumbo if the amount of the mortgage exceeds loan-servicing limits set by Fannie Mae and Freddie Mac—currently $766,550 in 2024 for a single-family home in all states (except Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $1,149,825).


Response: Operating cash flow is an important benchmark to determine the financial success of a company's core business activities as it measures the amount of cash generated by a company's normal business operations. Operating cash flow indicates whether a company can generate sufficient positive cash flow to maintain and grow its operations, otherwise, it may require external financing for capital expansion.


What Is Negative and Positive Convexity?

Response: If a bond's duration increases as yields increase, the bond is said to have negative convexity. The bond price will decline by a greater rate with a rise in yields than if yields had fallen.If a bond's duration rises and yields fall, the bond is said to have positive convexity. As yields fall, bond prices rise by a greater rate or duration.


Response: How much a CFP® costs will depend on your specific needs. On average, a CFP® charges between $1,800 and $2,500 for preparing a full financial plan. You also should expect $4,000 for a flat-fee retainer or $250 per hour for hourly services.


How Have New Industries Used White Papers?

Response: Cryptocurrencies have also been known to publish white papers during initial coin offerings (ICOs) and frequently issued white papers to entice users and "investors" to their projects.Bitcoin famously launched a few months after the pseudonymous Satoshi Nakamoto issued its famous white paper online in October 2008.


What Are the 2022 Trust and Estate Exemption Amounts?

Response: In 2022, a decedent's estate is allowed a $600 exemption, a trust required to distribute all income is allowed a $300 exemption, and a qualified disability trust is allowed a $4,400 exemption. All other trusts are allowed a $100 exemption.


Response: A notch downgrade is a decrease in the credit rating of a particular bond from a debt issuer. It is expressed in terms of notches, with each notch representing a difference in credit risk. For example, if a bond issuer's credit rating is downgraded from A- to BBB+, the downgrade would be expressed as one notch.A notch downgrade can occur when the creditworthiness of the bond or debt issuer deteriorates. This can be due to a variety of factors, including declining financial performance, increased debt levels, or changes in market conditions that affect the issuer's ability to meet its financial obligations. A notch downgrade can have significant implications for the issuer, as it may make it more difficult for the issuer to access funding in the future and may also lead to an increase in the issuer's borrowing costs. It can also have negative consequences for investors in the issuer's bonds, as a downgrade may indicate an increased risk of default and may lead to a decrease in the value of the bonds.


What Happened With Enron's Balance Sheets?

Response: Enron was an American energy, services, and commodity company. The corporation hid millions of dollars of debt and losses that it amassed from a series of failed projects and schemes from investors and analysts by using special purpose vehicles and special purpose entities. These were all kept off the company's balance sheets, thereby misleading board members and investors of these high-risk practices. Investors began losing confidence, which trickled down to Enron's SPVs and SPEs. Enron was forced to declare bankruptcy.


Response: For those who receive benefits from the Hospital Insurance Trust Fund, or Medicare Part A, most people don’t pay a Part A premium because they paid Medicare taxes while they were employed. However, those who don't qualify for free Part A may pay up to $505 each month in 2024.


What Are All the Chapters of the U.S. Bankruptcy Code?

Response: There are currently six chapters in the U.S. Bankruptcy Code. They are: Chapter 7 (liquidation for individuals or businesses), Chapter 9 (for municipalities), Chapter 11 (reorganization, usually for businesses), Chapter 12 (for family farmers and fishermen), Chapter 13 (reorganization for individuals), and Chapter 15 (international bankruptcies). Of these, Chapter 7, Chapter 11, and Chapter 13 are the most common.


Is There a Barry Minkow Movie Being Made?

Response: There was a Barry Minkow movie made in 2011 that was eventually released in 2018, titled Con-Man. During the filming, Barry was arrested and pleaded guilty to insider trading charges. In January of 2022, a docuseries titled King of the Con was released on Discovery+.


What's the Difference Between Fundamental and Technical Analysis?

Response: Fundamental analysis is a method of evaluating securities by attempting to measure the intrinsic value of a stock. The core assumption of technical analysis, on the other hand, is that all known fundamentals are factored into price; thus, there is no need to pay close attention to them. Technical analysts do not attempt to measure a security's intrinsic value, but instead, use stock charts to identify patterns and trends that might suggest what the security will do in the future.


Response: Most online trading platforms offer functionality for users to create their own watchlists, allowing them to easily track any security that catches their interest. To create a watchlist, you should first identify your key investment criteria and decide what kinds of investments you are looking for. Then, using a stock screener or similar tool, search for stocks that fit those criteria and add them to your watchlist.


Response: No easier method exists to extract a research sample from a larger population than simple random sampling. Selecting enough subjects completely at random from the larger population also yields a sample that can be representative of the group being studied.


Response: A named beneficiary is often an individual or a group of people, such as a person' acquaintance or family member. But the beneficiary can also be an estate or a non-profit organization, chosen by the account holder's insurance policy.


Response: A silent bank run is when depositors withdraw funds electronically in large volumes without physically entering the bank. Silent bank runs are similar to other bank runs, except funds are withdrawn via ACH transfers, wire transfers, and other methods that do not require physical withdrawals of cash.


Response: Tax brackets are set by Congress and enforced by the Internal Revenue Service (IRS). Changes typically come in the form of legislation like the Tax Cuts and Jobs Act of 2017, which kept seven brackets but lowered the rates that applied to almost every one.


What Are Some Price Abnormalities Observed on Quadruple Witching?

Response: One interesting quirk is that the price of a security may artificially tend toward a strike price with large open interest as gamma hedging takes place, a process known as pinning the strike. Pinning a strike imposes pin risk for options traders, where they become uncertain whether or not options with strike prices near the market price will finish in the money and be exercised.


Response: Bancassurance as we know it today appears to have begun in France in the 1970s (which would account for its seemingly French name). Spain was also an early adopter, in the 1980s. Both of those countries continue to be bancassurance market share leaders.


How Do You Calculate an Ex-Ante Interest Rate?

Response: As the name implies, an ex-ante interest rate is one that is determined before the actual interest rate is announced. So if you pay $10 interest on a $100 loan, you're paying 10% in interest. Keep in mind, though, that the ex-ante rate isn't adjusted for inflation. In this case, there is zero inflation.


Response: Yes, bearer bonds were discontinued in the U.S. in 1982 and no new bearer bonds have been issued since and are not allowed to be issued. Bearer bonds from before they were discontinued can still be redeemed with the government.


What Types of Costs do Businesses Incur?

Response: In general, business costs can be categorized as fixed vs. variable and direct vs. indirect.Fixed costs are those that do not change, such as rent or insurance payments.Variable costs will change with productivity such as wage labor or energy usage.Direct costs are those involved with production or operations, such as costs of raw materials.Indirect costs include things like overhead, which are not directly related to the business's core operations.


What Are the Contribution Limits for a Roth IRA?

Response: The contribution limit for a Roth IRA in 2021 and 2022 is $6,000. If you are aged 50 and older, you can contribute an additional $1,000.


What Happens if I Don't Agree to an Adhesion Contract?

Response: While you can't make changes to an adhesion contract, if you don't like what it states, you can turn it down and go elsewhere to make your purchase.


How Is the Federal Funds Rate Determined?

Response: It is customary for the Federal Open Market Committee to meet eight times annually to determine the federal funds rate. These rates are influenced by economic indicators, such as the core inflation rate and the durable goods orders report, which provide signals about the economic health of the country.


What Mathematical Concepts Are Attributed to John Nash Jr.?

Response: Nash is associated with several mathematical concepts, including the Nash-Moser inverse function theorem and the Nash–De Giorgi theorem. But his most famous work is probably the Nash embedding theorems, which the Norwegian Academy of Science and Letter called the "most original results in geometric analysis."


What is the difference between trading and investing?

Response: There are two major approaches to the financial markets: trading and investing. While they share some similarities, trading and investing differ in terms of time horizon, risk tolerance, and investment style, as well as approach. Trading is short-term in nature, while investing is long-term in nature. With investing, a more passive approach is taken. Investors will adjust their portfolios occasionally to reflect their long-term goals. Trading is much more active, with the frequent buying and selling of securities.


Response: Paper trading is a way for investors to learn and practice buying and selling stocks and other securities before they start doing so with real money. While it doesn't use real money, paper trading does involve the use of real strategies and tools to get the same results. Keep in mind that there are no real returns and losses realized by the investor.


Does the FLSA Cover Part-Time and Full-Time Employees Differently?

Response: The FLSA's minimum wage and record keeping sections apply to both part-time and full-time employees. However, the sections on overtime pay primarily affect full-time employees. Those working over 40 hours per week are more likely to be full-time employees, not part-time workers.


Response: High price sensitivity means consumers are especially sensitive to price changes and are likely to spurn a good or service if it suddenly costs more than similar alternatives.


How Does Basic Group Term Life Differ From Supplemental Insurance?

Response: Employers provide a basic level of group term life insurance at little or no cost to all eligible employees. Supplemental coverage is optional insurance at work that employees can purchase for an additional premium if they want more coverage for themselves, their spouse, or their children.


How Do Offshore Banking Units Ensure Privacy and Confidentiality?

Response: Offshore banking units ensure privacy and confidentiality through strict regulations and robust legal frameworks. Offshore jurisdictions often have stringent penalties for breaching confidentiality, discouraging unauthorized disclosures. However, it's essential to note that privacy should not be confused with secrecy, as offshore banks are required to comply with anti-money laundering regulations and may be obligated to share information with relevant authorities under certain circumstances.


Response: Offshore banking describes a relationship that a company or individual has with a financial institution outside the country of their residence. This requires opening a bank account, and making deposits, withdrawals, and transfers from that account—the exact same way you would with a bank account at home.


Response: The Harry Markowitz model is a financial model that is used for portfolio optimization. It helps investors choose the most efficient portfolio out of a wide array of portfolios for a specific set of securities. Markowitz won the Nobel Prize in Economics in 1990 along with William F. Sharpe and Merton Miller.


What Is the Outcome of a Circular Flow Model?

Response: A circular flow model doesn't necessarily end or have an outcome. Instead, it describes the current position of an economy regarding how its inflows and outflows are used. This information can be used to make changes about the economy. For example, if a country realizes it has deficient national income, it may choose to reduce its imports and scale back certain government programs.


Response: Errors in financial modeling can cause expensive mistakes. For this reason, a financial model may be sent to an outside party to validate the information it contains. Banks and other financial institutions, project promoters, corporations seeking funds, equity houses, and others may request model validation to reassure the end-user that the calculations and assumptions within the model are correct and that the results produced by the model are reliable.


How Does BVPS Differ from Market Value Per Share?

Response: While BVPS is calculated using historical costs, the market value per share is a forward-looking metric that takes into account a company's future earning power. An increase in a company’s potential profitability or expected growth rate should increase the market value per share. Essentially, the market price per share is the current price of a single share in a publicly traded stock. Unlike BVPS, market price per share is not fixed as it fluctuates based solely on market forces of supply and demand.


How Much Can You Inherit Without Paying Taxes?

Response: The six U.S. states with inheritance taxes provide varying exemptions based on the size of the inheritance and the familial relationship of the heir to the deceased. The federal estate tax exemption exempts $12.92 million over a lifetime in 2023, and $13.61 million over a lifetime as of 2024. There's no income tax on inheritances.


Do I Have to Report a 1035 Exchange on My Tax Return?

Response: A 1035 exchange must be reported on a tax return. If the funds are transferred from institution to institution, the transferring company will issue a 1099-R form, recording the amount transferred and a distribution code of 6" which denotes a 1035 exchange. Although the transaction is reportable, it is not taxable. If the exchange occurs in-house, the financial institution may not issue a 1099-R.


Response: Microeconomics has a wide variety of uses. For example, policymakers may use microeconomics to understand the effect of setting a minimum wage or subsidizing production of certain commodities. Businesses may use it to analyze pricing or production choices. Individuals may use it to assess purchasing and spending decisions.


How Can You Avoid Paying Back Depreciation Recapture?

Response: Investors can avoid paying tax on depreciation recapture by turning a residential property into a primary residence. In addition, the taxpayer could conduct a 1031 tax-deferred exchange. Also, when an investor passes away, their heirs often receive the property on a stepped-up basis.


Response: In Japanese, "ichimoku" translates to "one look," referring to the fact that support and resistance levels can be gauged in just a glance.


How is a flexible management system (FMS) set up?

Response: An FMS may be set up in a number of ways. After all, its main lure is its adaptability. One configuration might involve interconnected computer workstations that process the end-to-end creation of a product. This starts with loading/unloading functions and proceeds to machining and assembly, storing, quality testing, and data processing. The FMS programming can automatically switch from one set of products in a certain amount to another set in a different amount.


Response: Although it may seem daunting, an IRS audit shouldn't worry you. The agency routinely conducts audits for corporations and individuals—some randomly while others are flagged because of certain types of income, credits, and deductions. The best way to prepare for an audit is to keep your tax records, including any receipts and tax documents, in a location that's easily accessible for up to three years.


Why Are They Called 'Cottage Industries?'

Response: Cottage industries may be the original remote work system. Before the Industrial Revolution, they opened a way for people living in rural areas to make a living doing labor-intensive jobs like spinning wool, tanning leather, and sewing clothing. In modern terminology, they were often subcontractors, finishing goods and sending them on to businesses that packaged them for shipment to suppliers and retailers.In Europe and America, this work really was mostly done in cottages, primarily by women who did not have access to other trades and professions.


What Happens to Unused Pell Grant Money?

Response: Generally, your school will first apply the money from your Pell Grant and other aid, such as loans, toward your tuition, fees, and room and board. If there's anything left over in your account after that (often referred to as a "credit balance"), the school is required to pay it to you within 14 days, unless you've authorized the school to apply it toward your future bills. These federal funds are typically disbursed each school term or at least twice a year.


What Is the Objective of Investing in a Natural Gas ETF?

Response: The objective of investing in a natural gas ETF is to gain exposure to the natural gas market. Investors may seek to profit from price movements, hedge against natural gas price changes, or diversify their investment portfolios.


What Are Some Disadvantages of Living Trusts?

Response: The downsides of trusts, aside from their cost, will depend on whether it is a revocable or irrevocable trust—each of which serves its own purpose. A revocable trust is not sheltered from tax authorities or creditors, which limits its usefulness as a way to protect assets while one is still alive. An irrevocable trust involves forfeiting all ownership and control of the assets put inside of it, along with very little flexibility in how the trust can be directed after it is established.


What Is an Example of the Least Squares Method?

Response: Consider the case of an investor considering whether to invest in a gold mining company. The investor might wish to know how sensitive the company’s stock price is to changes in the market price of gold. To study this, the investor could use the least squares method to trace the relationship between those two variables over time onto a scatter plot. This analysis could help the investor predict the degree to which the stock’s price would likely rise or fall for any given increase or decrease in the price of gold.


Do Compensatory Damages Include Emotional Distress?

Response: Compensatory damages can refer to emotional distress, including mental anguish and loss of enjoyment of life.


Response: No, owning and trading bitcoin on regulated exchanges is legal in South Korea.


Response: Before starting, do thorough research and make sure it's feasible for you. Consult real estate professionals or others who operate REIGs to get an understanding of what's involved and what to expect. Create a plan on how you want your REIG to operate—including rules, fees, and meetings—and what types of real estate you want to invest in. Then solicit members, including those who are experienced and skilled in real estate investments. Once the group is formed, market to investors.


Response: Jewelry floaters typically cover a broader range of damage to your jewelry than homeowners insurance would. For example, a jewelry floater may cover:Accidental lossTheft, both at home and away from homeDamage to the jewelry, such as broken prongs or clasps


Response: The NAVPS values of mutual funds are declared daily after the close of the U.S. stock market at 4 p.m. Eastern Standard Time (EST). There is no set deadline when a mutual fund must update and submit its NAVPS to regulatory agencies. Typically, the NAVPS is declared between 4 p.m. and 6 p.m. EST. For more on this topic, read When Do Mutual Funds Update Their Prices?


When Would You Use Stratified Random Sampling?

Response: Stratified random sampling is often used when researchers want to know about different subgroups or strata based on the entire population being studied—for instance, if one is interested in differences among groups based on race, gender, or education.


Are Restructuring Charges Always Made When a Company's in Trouble?

Response: Not always. They're made when a company feels that a reorganization is necessary for its financial well-being, which can be for a variety of reasons. For instance, they can occur when high demand for a company's products requires it to add more production space and employees. But they also can occur when a slow economy has depressed consumer spending and a company must shut down a plant to save money.


Response: The moving average convergence/divergence (MACD) is an indicator that seeks to add greater insight to the moving average by determining the relative momentum of the price movement. The MACD is calculated by subtracting the 26-period EMA from the 12-period EMA. The result may help a trader determine whether a price trend appears to be gaining or losing strength. Some traders use MACD in combination with the DEMA rather than with a standard moving average.


Response: Value investing is an investment philosophy that involves purchasing assets at a discount to their intrinsic value. This is also known as a security’s margin of safety. Benjamin Graham, known as the father of value investing, first established this term with his landmark book, The Intelligent Investor, in 1949. Notable proponents of value investors include Warren Buffett, Seth Klarman, Mohnish Pabrai, and Joel Greenblatt.


How Is Gray Box Testing Used in Cybersecurity?

Response: Gray box testing can be used to see what kind of access a user has when signing into a website or app, and therefore, how easy or difficult it might be for someone to hack into the site with similar credentials, or without any credentials.


What Are the 5 Main Components of Personal Finance?

Response: The five main components are income, spending, savings, investing, and protection.


Response: The cost of equity is the return that a company must realize in exchange for a given investment or project. When a company decides whether it takes on new financing, for instance, the cost of equity determines the return that the company must achieve to warrant the new initiative. Companies typically undergo two ways to raise funds: through debt or equity. Each has differing costs and rates of return.


Response: The UFMI premium the FHA requires on a mortgage is 1.75% of the loan amount. So, if the initial loan is $200,000, 1.75% of that amount would be $3,500. The mortgage amount would thus become $203,500 with the UFMI premium included.


Response: An accredited investor—usually described as a sophisticated investor. They are someone with enough experience or wealth to make certain risky investments that are not available or permitted to the general public. In the United States, an accredited investor must have a net worth of over $1 million, excluding the value of their primary residence.


Response: Development economics is the study of how emerging nations become more financially stable. It can be used as a tool for students and economists working to develop policies that can be used in creating domestic and international policy.


How Do You Calculate Owners' Equivalent Rent?

Response: Owners' equivalent rent (OER) is calculated using a monthly survey of consumers living in a unit. The survey poses the question of how much the owner would pay to rent their home rather than own it.


What does it mean for a derivative warrant to be dilutive?

Response: A derivative warrant is dilutive because it dilutes or reduces each other shareholder's ownership in the issuing company. If you hold a warrant allowing you to buy 1 share in a company that currently has 10 shares outstanding and you exercise it, the number of shares outstanding will increase to 11. You'll gain ownership while each other shareholder will lose a percentage of their stake in the company.


What Is the Largest Sector of the Economy?

Response: The tertiary sector is the largest sector in the United States since the service industry represents the largest share of economic activity.


Response: Bill Gross clashed with PIMCO's management, including Chief Executive Officer Mohamed El-Erian, and was known for his outbursts and boasts. Tensions allegedly forced Gross to resign in September 2014, when he left PIMCO for Janus.


Does China Still Have the One-Child Policy?

Response: No. China reverted to a two-child policy after its one-child policy ended in 2015, and the restrictions were gradually loosened before its official end.


What Is the Difference Between a Tax Credit and a Tax Deduction?

Response: Tax credits and tax deductions both reduce the amount of tax you owe, but they work in different ways. Tax credits directly lower the amount of tax you owe, while tax deductions decrease your taxable income.Say you're eligible for a $1,000 tax credit and a $1,000 tax deduction. The tax credit reduces your tax bill by $1,000. So, if you owed $1,500 in taxes and then took a $1,000 credit, your tax bill would be $500 ($1,500 - $1,000). On the other hand, the tax deduction reduces your taxable income by $1,000. So, if you fall into the 22% tax bracket, the $1,000 deduction would save you $220 ($1,000 × 22%). Tax credits are more favorable because they save you more money than tax deductions.


Response: There are several ways to figure a company's solvency ratio, but one of the most basic formulas is to subtract their liabilities from their assets. If there is still value after the liabilities have been subtracted, the company is considered solvent.


Response: Yes, paper money is fiat money. Fiat money is any money that is considered legal tender. Paper money and coins are legal tender.


Response: The overarching goals of BRICS are cooperation, development, and influence in international affairs. Drilling down, BRICS seeks to build economic cooperation, development financing, political coordination, social and cultural exchanges, technology and innovation, sustainable development, and peace and security.


What Are the Disadvantages of a Money Market Account?

Response: Some disadvantages of a money market account include a lower yield than some other investment accounts, possible limits on the number of transactions allowed in a certain period, and minimum account balances.


What Are the 3 Types of Investors in a Business?

Response: The three types of investors in a business are pre-investors, passive investors, and active investors. Pre-investors are those that are not professional investors. These include friends and family that are able to commit a small amount of capital towards your business. Passive investors are those that are professional investors that commit capital but do not play an active role in managing the business. An example would be angel investors. Active investors are those that commit capital but are also actively involved in the business. They make decisions on strategy, senior management, and more. Examples include venture capitalists and private equity firms.


Response: Alan Greenspan was born on March 6, 1926, making him 97 years old as of October 2023.


Why Is the Time Value of Money Important?

Response: The concept of the time value of money can help guide investment decisions. For instance, suppose an investor can choose between two projects: Project A and Project B. They are identical except that Project A promises a $1 million cash payout in year one, whereas Project B offers a $1 million cash payout in year five. The payouts are not equal. The $1 million payout received after one year has a higher present value than the $1 million payout after five years.


Can Owner Financing Be Transferred to a Third Party?

Response: In some cases, owner financing can be transferred to a third party, subject to the terms of the original agreement and approval from the seller.


Response: A non-negotiable check has no monetary value. It is essentially a paper receipt provided to a payee as a record of payment.Non-negotiable checks are typically given to employees whose paychecks are automatically deposited.


What Are LME Warehouse and Stock Reports?

Response: The LME regularly publishes a number of reports on its website which include opening and closing stocks, stock movements, wait times, and canceled and live warrants across locations and metals. Check the LME's website for the latest warehouse and stock reports.


Response: Too much inflation is generally considered bad for an economy, while too little inflation is also considered harmful. Many economists advocate for a middle ground of low to moderate inflation, of around 2% per year.Generally speaking, higher inflation harms savers because it erodes the purchasing power of the money they have saved; however, it can benefit borrowers because the inflation-adjusted value of their outstanding debts shrinks over time.


How Do You Compute Amortization of Intangibles?

Response: There are several ways to calculate the amortization of intangibles. The most common way to do so is by using the straight line method, which involves expensing the asset over a period of time. Amortization is calculated by taking the difference between the cost of the asset and its anticipated salvage or book value and dividing that figure by the total number of years it will be used.


How Are Stocks Evaluated for Inclusion in the Russell 3000?

Response: FTSE Russell calculates the total market capitalization of each stock to determine whether it is large enough to include in the Russell indices. Total market capitalization is determined by multiplying total outstanding shares by the market price as of the rank day for stocks considered at annual reconstitution.


Response: A SWOT analysis is used to strategically identify areas of improvement or competitive advantages for a company. In addition to analyzing thing that a company does well, SWOT analysis takes a look at more detrimental, negative elements of a business. Using this information, a company can make smarter decisions to preserve what it does well, capitalize on its strengths, mitigate risk regarding weaknesses, and plan for events that may adversely affect the company in the future.


Who Came Up With the Triple Bottom Line?

Response: The triple bottom line was conceived by entrepreneur and business writer John Elkington in 1994 while at the think tank SustainAbility, and it was later incorporated into the oil company Shell's first sustainability report in 1997. As interest in sustainable investing has grown, the need for a transparent and consistent measurement framework led to the creation of the non-profit Sustainability Accounting Standards Board (SASB).


Who Does the Real Estate Settlement Procedures Act (RESPA) Protect?

Response: The Real Estate Settlement Procedures Act (RESPA) is intended to protect consumers who are seeking to become eligible for a mortgage loan. However, RESPA does not protect all types of loans. Loans secured by real estate for a business or agricultural purpose are not covered by RESPA.


Can Vertical Mergers Benefit Small Businesses?

Response: Vertical mergers can have mixed effects on small businesses. On one hand, small businesses may benefit from increased access to distribution channels or improved relationships with larger vertically integrated companies. However, vertical mergers can also create challenges if small businesses face increased competition or encounter barriers to accessing certain markets controlled by the merged entity.


Response: Yes, when LEAPS are sold at a profit, the gain is taxable. If the LEAP contract was held for at least one year and one day, the taxpayer will be taxed at the long-term capital gain rate. If the contract was held for shorter, the taxpayer will be taxed at a short-term capital gain rate.


Response: Aggregate demand is the term used to describe the total demand for all finished goods and services in the market during a certain time. This figure is commonly expressed as a dollar figure—notably the prices at which consumers pay for finished products. Aggregate demand is calculated by adding together consumption spending, government spending, investment spending, and a country's net exports.


Response: You show interpersonal skills by the way you behave toward other people. Someone with good interpersonal skills will be supportive, kind, empathetic, patient, and respectful in the way they work with colleagues. Typically, they'll be a pleasure to be around.


Response: The average salary of a CFO as of Jan. 2024 is roughly $437,711 a year, according to Salary.com.


What Are the Different Types of Estoppel?

Response: Estoppel comes in many different forms. Some are more common while others are lesser known. They include equitable estoppel, promissory estoppel, collateral estoppel, and estoppel by deed. Others include estoppel by record, estoppel by deed, laches, estoppel by silence, and reliance-based estoppel.


How Is Net Margin Different from Other Profit Margin Measures?

Response: Net profit margin takes into account all costs involved in a sale, making it the most comprehensive and conservative measure of profitability. Gross margin, on the other hand, simply looks at the costs of goods sold (COGS) and ignores things such as overhead, fixed costs, interest expenses, and taxes. Operating margin further takes into account all operating costs but still excludes any nonoperating costs.


Response: Mortgage lenders will need to approve prospective borrowers through an application and underwriting process. Home loans are only provided to those who have sufficient assets and income relative to their debts to practically carry the value of a home over time. A person’s credit score is also evaluated when making the decision to extend a mortgage. The interest rate on the mortgage also varies, with riskier borrowers receiving higher interest rates.Mortgages are offered by a variety of sources. Banks and credit unions often provide home loans. There are also specialized mortgage companies that deal only with home loans. You may also employ an unaffiliated mortgage broker to help you shop around for the best rate among different lenders.


Can You Cancel Life Insurance Policy at Any Time?

Response: You can cancel a life insurance policy at any time. However, if you cancel a policy after your free look period ends, you will not have your premium refunded although you can receive your cash value in a lump sum, minus any fees.


Does the U.S. Dollar's Global Role Depend on Its Use to Settle Oil Sales?

Response: No, the U.S. dollar is used to settle oil sales because of its wide global acceptance. That acceptance makes it easier for oil exporters to invest the export proceeds.


Response: For an expense to qualify as a production cost it must be directly connected to generating revenue for the company. Manufacturers carry production costs related to the raw materials and labor needed to create their products. Service industries carry production costs related to the labor required to implement and deliver their service. Royalties owed by natural resource-extraction companies also are treated as production costs, as are taxes levied by the government.


What Information Is Needed for a Telegraphic Transfer (TT)?

Response: The most pertinent information required for the telegraphic transfer is the account numbers and routing numbers of the parties and the financial institutions involved. Then there is the amount of money being transferred and the bank or non-bank transfer provider, such as Western Union, that is chosen to actually carry out the transaction (though, strictly speaking, TTs are carried out between two banks and don't involve third parties). Other details may also be required for security purposes and to confirm the identity of the sender.


Response: If a company has excess cash on hand, it might invest it in a cash equivalent called a money market fund. This fund is a collection of short-term investments (i.e., generally, with maturities of six months or less) that earns a higher yield than money in a bank account. When the company decides it needs cash, it sells a portion of its money market fund holdings and transfers the proceeds to its operating account.


What Technical Indicators Can Be Used to Spot Whipsaws?

Response: Certain technical indicators are useful in identifying a whipsawing market. Envelopes, momentum indicators, parabolic SAR, and the vortex indicator are some good examples.


Response: Leveraged ETPs seek to magnify the returns of an underlying index or asset class using financial derivatives and debt. Inverse ETPs, on the other hand, aim to provide the opposite (inverse) performance of the underlying index. These ETPs are designed for sophisticated investors seeking to capitalize on short-term market movements, often contrasting how the ETF is naturally moving.


What Is Covered by Uninsured Motorist Insurance?

Response: UM coverage has two parts: bodily injury and property damage. UM bodily injury typically pays for medical expenses for you and your passengers, and may also pay for lost wages. UM property damage generally pays to repair or replace your car and other items damaged by the accident. The exact coverage terms depend on your state laws and insurance policy, so make sure to read the fine print.


Response: First, submit a short online application via the TSA's PreCheck website, then schedule an in-person interview at an enrollment center. Enrollment centers are located by zip code or address search.


Why Are Profitability Ratios Significant?

Response: They're significant because they can indicate the ability to make regular profits (after accounting for costs), and how well a company manages investments for a return for shareholders. They can reflect management's ability to achieve these two goals, as well as the company's overall financial well-being.


Response: Coinbase Pro was rebranded in 2022, becoming Coinbase Advanced Trade. It offers the same services as Coinbase Pro.


Response: Over time, the EMS underwent several changes. The most significant change was the transition from the EMS to the European Economic and Monetary Union with the introduction of the euro in 1999. This marked a culmination of efforts to establish a single currency for the eurozone.


What is an example of an asset-backed security (ABS)?

Response: A collateralized debt obligation (CDO) is an example of an asset-based security (ABS). It is like a loan or bond, one backed by a portfolio of debt instruments—bank loans, mortgages, credit card receivables, aircraft leases, smaller bonds, and sometimes even other ABSs or CDOs. This portfolio acts as collateral for the interest generated by the CDO, which is reaped by the institutional investors who purchase it.


Does the IRS Need to Know About Related-Party Transactions?

Response: Yes. The Internal Revenue Service (IRS) examines related-party transactions for any conflicts of interest. If it finds conflicts, the IRS will not allow any tax benefits claimed from the transaction. In particular, the IRS often scrutinizes property sales between related parties and deductible payments between related parties.


Response: A commodity trading advisor, or CTA, is a person or firm that advises clients in the use of derivatives as investments. CTAs are required to be registered by the National Futures Association, the industry's independent, self-regulatory organization.


Response: The total testing time for the GRE is approximately 3 hours and 45 minutes, including time for breaks and instructions. The individual sections' durations vary, with Verbal and Quantitative sections lasting around 1 hour each, and Analytical Writing taking about 1 hour.


Response: The first-year of Wharton's MBA program costs $124,476, which includes tuition and fees, room and board, books and supplies, and health insurance. Second-year costs are $122,476.


What Is a Collateralized Loan Obligation (CLO)?

Response: A Collateralized Loan Obligation (CLO) is a type of security that allows investors to purchase an interest in a diversified portfolio of company loans. The company selling the CLO will purchase a large number of corporate loans from borrowers such as private companies and private equity firms, and will then package those loans into a single CLO security. The CLO is then sold off to investors in a variety of pieces, called “tranches”, with each tranche offering its own risk-reward characteristics.


Response: Binance is not banned in the U.S. However, on May 13, 2021, Bloomberg reported that Binance Holdings is under investigation by the Justice Department and Internal Revenue Service. According to the report, laundering and tax sleuths have probed individuals with insight into Binance's business.“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” Binance spokeswoman Jessica Jung said. “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.”Binance is incorporated in the Cayman Islands.


What is a qualified charitable organization?

Response: A qualified charitable organization must be a nonprofit entity that meets the requirements of the U.S. Treasury under Section 501(c)(3) of the Internal Revenue Code (IRC).


Response: The 1040-X allows a taxpayer to amend or correct a previously filed tax return. If you forgot to claim a credit or record a deduction, this is the form to use. If you made a mathematical error, forget about it. The IRS always runs the numbers and corrects that kind of error.


Response: The higher the HDI, the better. A high HDI essentially means that the country in question offers a generally high standard of living, with decent healthcare, education, and opportunities to earn money.


How Can You Improve Your Cash Management?

Response: There are a number of ways an individual or business can improve their cash management. Some of these steps include improving their accounts receivables (increasing income, encouraging clients to pay early/on time), investing excess cash, seeking out better financing rates on debt, safeguarding bank accounts to prevent fraud, and implementing better accounts payable processes.


Response: Yes. The Federal Insurance Contributions Act, or FICA, requires that wage earners contribute a portion of their earnings to fund the Social Security and Medicare programs. Ultimately, you'll be entitled to what's referred to as earned benefits. You paid for them and they're owed to you.


What Types of Transactions Are Conducted Through Vostro Accounts?

Response: Vostro accounts facilitate a range of transactions including fund transfers, foreign currency exchanges, trade settlements, payment processing, and collection of local currency funds on behalf of the respondent bank's customers.


How Do You Calculate Additional Paid-in Capital?

Response: The APIC formula is APIC = (Issue Price – Par Value) x Number of Shares Acquired by Investors.


Why Was the Farmers Home Administration (FmHA) Terminated?

Response: Members of Congress became concerned when a significant number of FmHA loans defaulted and, in 1992, directed the U.S. Government Accountability Office (GAO) to conduct a study.  It found a multitude of problems related to weak lending practices. In 1994, the FmHA was terminated and its functions transferred to the Farm Service Agency at the USDA, and in the years that followed, to USDA Rural Development.


What Is the Origin of the Term ‘Grandfather Clause’?

Response: The term “grandfather clause” was coined to describe laws put in place in the South after the U.S. Civil War to prevent African Americans from voting. New laws governing who could and could not vote were implemented that required literacy tests, owning property, and the payment of poll taxes. However, anyone whose grandfather had had the right to vote was exempt from these new laws, hence the name. As slaves were considered property and thus could not vote, it ensured that all African Americans would be subject to the new voting restrictions, while most White Americans would not.


Response: TSR, short for total shareholder return, measures the appreciation in the price of a stock's shares, plus the total sum paid in dividends per share, over a specific time period.


How Does Keynesian Economics Differ From Classical Economics?

Response: According to Keynes, classical economics held that swings in employment and economic output create profit opportunities that individuals and entrepreneurs have an incentive to pursue, eventually correcting imbalances in the economy. In contrast, Keynes argued that, during recessions, business pessimism and certain characteristics of market economies would exacerbate economic weakness and cause aggregate demand to plunge further. Keynesian economics holds that, during periods of economic woe, governments should undertake deficit spending to make up for the decline in investment and boost consumer spending to stabilize aggregate demand.


Response: A real estate agent juggles various tasks, like property appraisals, negotiations, and administrative duties while also meeting with clients. Their research typically involves studying market trends, property values, local zoning laws, neighborhood features, and marketing strategies. They also keep abreast of the latest real estate laws and regulations.


What is the difference between MBO and management by exception (MBE)?

Response: In management by exception (MBE), management only addresses instances where objectives or standards are transgressed. Thus, workers are left alone until and unless proficiency is not met.


Response: War chests are sizable funds set aside by a company. These are useful for making large investments or purchases when opportunities arise or can serve as a buffer against economic downturns. By having a war chest, a company can wait until the time is right and jump on such opportunities. Having a large war chest can also be used as a defense against a hostile takeover.


What Is Requisition Reconciliation in Accounting?

Response: Requisition reconciliation in accounting is the process by which two sets of records are compared for accuracy, completeness, and consistency. The comparison will help identify and explain discrepancies. Under generally accepted accounting principles (GAAP), the required double-entry accounting method helps to pinpoint when and where errors exist.


Why Use Basis Points Versus Percentages?

Response: The reason that traders use basis points to express changes in value or rate is because it can be clearer and prevent any ambiguity. This can help expedite communications and avoid trading mistakes. Since the values of financial instruments are often highly sensitive to even small changes in underlying interest rates, ensuring clarity can be very important for traders.


Can Joint Tenants Add New Co-Owners to the Property?

Response: Generally, joint tenancy requires all joint tenants to acquire their interests at the same time. Adding new co-owners after the initial purchase would likely create a tenancy in common instead of a joint tenancy. However, joint tenants can sell or transfer their shares, and new co-owners can be added through this process.


Response: The samples of independent t-tests are selected independent of each other where the data sets in the two groups don’t refer to the same values. They may include a group of 100 randomly unrelated patients split into two groups of 50 patients each. One of the groups becomes the control group and is administered a placebo, while the other group receives a prescribed treatment. This constitutes two independent sample groups that are unpaired and unrelated to each other.


Response: The five stocks that make up the “FAANG” acronym—Meta (META), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG)—are all well-known brands among consumers. But they are also famous for their remarkable growth in recent years, with market capitalizations ranging from $166 billion (in the case of Netflix) to $2.7 trillion (in the case of Apple), as of Q1 2022. From an investment perspective, these five stocks are generally praised for their stellar historical track records and clear leadership positions within their industries.


What Is the Difference Between an Options Contract and a Right of First Refusal?

Response: An options contract is an agreement between futures traders, where the contract buyer purchases the right but not the obligation to exercise the transaction. A right of first refusal is the right but not the obligation to match an offer on an asset and purchase it.


How Hard Is It to Get Into Wharton Grad School?

Response: Wharton's MBA program is extremely difficult to get into. The school receives between 6,000 and 7,000 applicants a year and accepts approximately 1,000 of those.


Response: Lenders will typically include in your monthly mortgage payment, property taxes, homeowners insurance premiums, and homeowners association fees, if any, in your housing expenses. Some lenders may include your utilities, too, but this would generally be categorized as contributing to your total debts.


Response: IFRS fosters transparency and trust in the global financial markets and the companies that list their shares on them. If such standards did not exist, investors would be more reluctant to believe the financial statements and other information presented to them by companies. Without that trust, we might see fewer transactions and a less robust economy.IFRS also helps investors analyze companies by making it easier to perform “apples to apples” comparisons between one company and another and for fundamental analysis of a company's performance.


Who Counts as Immediate Family for a Green Card?

Response: A U.S. citizen can petition for members of their immediate family to receive permanent resident ("green card") status. For these purposes, the immediate family is defined as one's spouse, a child who is unmarried and less than 21 years old, or a parent (if the applying citizen is over 21 years old). Older children, married children, siblings, half-siblings and adoptive siblings are also eligible, although they may face longer wait times.


Are Balloon Payments a Good Idea for a Car Purchase?

Response: A balloon payment may be suitable for borrowers who are in urgent need of a car but are unprepared to deal with a large monthly payment.In such cases, the borrower will probably pay a higher interest rate than is charged on a conventional car loan.Most importantly, the borrower must keep an eye on that looming balloon payment at the end of the loan term and be ready to pay it.


What Are Examples of Upstream Companies?

Response: The upstream sector involves companies that search for deposits of oil or gas (exploration) and then its extraction through drilling or other methods. Upstream also includes related services companies such as those dealing in rig operations, feasibility studies, machinery rental, and extraction of chemical supply.


What Is the Difference Between Caveat Emptor and Uberrimae Fidei?

Response: Uberrimae fidei and caveat emptor are two completely opposing principles: two sides of the coin. While uberrimae fidei implies "utmost good faith," where both parties disclose all information, caveat emptor implies "buyer beware," where all material information is not disclosed and the risk is unknown to the buyer who is solely responsible for uncovering any risks.


Response: A quantum computer cost billions to build. However, in 2020, China-based Shenzhen SpinQ Technology planned to sell a $5,000 desktop quantum computer to consumers for schools and colleges. The previous year, it had began selling a quantum computer for $50,000.


Response: Indifference curve analysis operates on a simple two-dimensional graph. Each axis represents one type of economic good. The consumer is indifferent between any of the combinations of goods represented by points on the indifference curve because these combinations provide the same level of utility to the consumer. Indifference curves are heuristic devices used in contemporary microeconomics to demonstrate consumer preference and the limitations of a budget.


Response: The formula to calculate a country's monetary base is by adding together the currency in circulation and its reserves or MB = CC + R. So if there's a $1 billion worth of currency in circulation and $2 billion in reserves, the monetary base is $3 billion.


What Is the Last Mile in Terms of Internet Service?

Response: In Internet industries, the last mile refers to the final leg of the telecommunications networks that deliver telecommunication services to customers. It is the portion of the telecommunications network chain that physically reaches the customer's premises.


Response: A code of ethics in business is a set of guiding principles to inform how decisions are made across an organization. In this way, it informs not only employees, but also customers, business partners, suppliers, or investors about how the company conducts business. Companies will use a code of ethics to state the values they consider important and the way in which these guide their operations.


Response: New businesses are often highly risky and cost-intensive ventures. As a result, external capital is often sought to spread the risk of failure. In return for taking on this risk through investment, investors in new companies can obtain equity and voting rights for cents on the potential dollar. Venture capital, therefore, allows startups to get off the ground and founders to fulfill their vision.


How Do You Show a Promotion on a Resume?

Response: You can show a promotion on a resume by listing it as a separate line item above your previous job. Your goal should be to demonstrate that you had escalating responsibility while working for a single company; this is often done by listing each role on a different line to clearly show job growth.


Response: An OMS helps traders enter and execute orders, from the simple to the complex, more efficiently. This lowers transaction costs, helps gain best execution, and reduces errors. It also reports fills, books trades, and updates one’s positions or portfolio. Some OMSs can also automate trading strategies or risk-mitigating measures such as stop-losses and trailing stops.


Response: That depends on your investment goals, risk tolerance, and financial needs. For example, long-term investors who take a buy and hold approach to the markets might consider reviewing their allocations once a year with their financial advisors to see if rebalancing is warranted. Other investors with shorter-term goals may wish to rebalance more frequently to be sure they stay on track to meet those goals.


Response: Denmark scores an 18 on the PDI scale. "Danes do not lead," the summary states, "they coach and employee autonomy is required." Danes have a highly egalitarian mind-set and expect to be consulted, not ordered around.


Response: The Iranian rial is weak primarily because of the political instability of Iran. The country operates an authoritarian regime that is unpopular amongst many of its citizens. It also has been accused of supporting terrorism, which has resulted in strict economic sanctions on the country, which has decimated its economy. Furthermore, the country depends heavily on oil. With sanctions, the country has difficulty selling its oil globally. Furthermore, when the price of oil drops, Iran's economy is hit hard.


What Is a Typical Commission for Options Trades?

Response: Many brokers charge a fixed commission plus a per-contract fee for options trades. This could be something like $5.95 + $1.00 per contract (so, the total fee on a 10-lot trade would be $5.95 + $10 = $15.95). The exact commission structure will vary based on your broker and the level of trading that you do with them. For example, E•TRADE charges $0.65 per contract but reduces it to $0.50 per contract for accounts with more than 30 trades in a month.


What's the Difference Between DAP and DDP?

Response: DAP and DDP are two Incoterms used in international trade. Under DAP or delivered-at-place, the buyer and seller share some of the responsibilities of the shipment of goods. The seller loads and ships goods to the buyer. They also bear the cost of transport and must pay for any losses that may result en route. Once the goods arrive at the destination, the buyer assumes control. This means they are responsible for any taxes, duties, or fees, and for unloading the cargo.DDP or delivered duty paid works a little differently. Under this rule, the seller takes on all of the risk, responsibility, and costs associated with transport. This includes the cost of shipping, insurance, duties (import and export), and any other agreed-upon expenses with the buyer.


Response: Yes, to some extent it exists in certain countries whose governments seek to maintain control over property ownership, trade, and the creation of wealth.


How Do I Report Distributions From a 409A Plan?

Response: Distributions from a 409A Plan are income that you previously earned but did not receive until you took the distribution. This means that they will be reported by your employer on a W-2 form, which you should receive, even if you are no longer an employee at that company. It may also be reported on form 1099-MISC.


What Is the Role of a Non-Executive Director?

Response: A non-executive director is an individual appointed to a company's board of directors. They are not employed by the company but act as independent advisors or directors to help the company achieve its goals. They are involved in policymaking and planning exercises and routinely monitor the company's executive directors to ensure they act in the interest of corporate stakeholders.


Response: Purchasing power refers to how much you can buy with your money. As prices rise, your money can buy less. As prices drop, your money can buy more.


Response: Theoretically, businesses with freemium models can lose money if their conversion rate to premium users is too low.


What Do National Insurance Contributions Fund?

Response: National Insurance contributions made by employees in the United Kingdom are used to fund various social benefit programs. These include the country's pension system, unemployment benefits, and sickness benefits, among others.


What Are the Limitations of Nash Equilibrium?

Response: The primary limitation of Nash equilibrium is that it requires an individual to know their opponent’s strategy. A Nash equilibrium can only occur if a player chooses to remain with their current strategy if they know their opponent’s strategy.In most cases, such as in war—whether that be a military war or a bidding war—an individual rarely knows the opponent’s strategy or what they want the outcome to be. Unlike dominant strategy, the Nash equilibrium doesn’t always lead to the most optimal outcome. It just means that an individual chooses the best strategy based on the information they have.Furthermore, in multiple games played with the same opponents, the Nash equilibrium does not take into consideration past behavior, which often predicts future behavior.


Response: The time limit for claiming a performance bond will be spelled out in the bond contract. However, most performance bonds have a duration of twelve months, with some lasting for 36 months. In addition, your bond may be renewable or non-renewable.


Response: Predatory lending is any lending that takes advantage of the borrower through unfair and abusive practices or loan terms. These can include extremely high-interest rates, high fees, undisclosed costs and terms, and any characteristic that reduces the equity of the borrower.


How Often Should a PEST Analysis Be Done?

Response: A PEST analysis can be done as often as a business would like. It is good to perform a PEST analysis when there have been significant changes that may impact a business, such as a change in interest rates, new government policies, or the introduction of new technology. It should be done often so as not to become outdated.


What Is Unlevered Free Cash Flow Margin?

Response: Cash flow margins are ratios that divide a cash flow metric by overall sales revenue. UFCF margin would therefore represent the amount of cash available to a firm before financing charges as a percentage of sales.


Response: Various iterations of TQM have been developed, each with its own set of principles. Certain core elements persist nonetheless. These include good leadership, emphasis on quality, customer priority, error correction and improvement as an ongoing process, and job training.


Do Contra Accounts Have Debit or Credit Balances?

Response: Contra assets have natural credit balances. Whereas assets normally have positive debit balances, contra assets, though still reported along with other assets, have an opposite type of natural balance.Contra liability, equity, and revenue accounts have natural debit balances. These three types of contra accounts are used to reduce liabilities, equity, and revenue which all have natural credit balances. Therefore, for these three, the debit balance actually represents a negative amount.


How Does Default Affect Your Ability to Get Credit in the Future?

Response: Defaulting on a debt makes an individual or company considerably less attractive to prospective lenders. It may be impossible for them to borrow again anytime soon, except at exorbitant interest rates (and maybe not even then). In the case of individuals, a default can remain on your credit report and have a negative effect on your credit score for up to seven years.


How Can I Avoid Paying Tax on Investment Income?

Response: There are a number of investments and savings vehicles that yield returns that are tax-free at least at the federal level.The biggest category of these is municipal bonds. These are issued by state and local governments and public institutions like school districts and water departments in order to raise money. The money may be used for specific projects that benefit the community, or it may go into the general fund.In any case, the interest they pay their bondholders is free of federal tax. It may or may not be free of state and local tax. Each state and municipality sets its own rules, but often the interest is tax-exempt if it is issued in that state.Keep in mind that municipal bonds pay a lower rate of return than corporate bonds in return for that tax break. They are a popular choice for high-net-worth investors who want to shelter some of their income from taxes.


Has there been an increase in speculative trading in recent years?

Response: Yes, there has been an increase in speculative trading in recent years. Several factors have contributed to this growth:Technology advancements: The rise of online trading platforms and mobile apps has made it easier and more accessible for individual investors to engage in speculative trading.Lower costs: Online brokerages have reduced trading costs, including commissions and fees, making it more affordable for individual investors to participate in speculative trading.Greater access to information: The internet and social media have made it easier for investors to access financial news, analysis, and opinions.The popularity of new asset classes: The emergence of cryptocurrencies and other alternative investments has attracted many speculators looking for high returns and unique opportunities.


Response: Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud. Besides complying with laws and regulations and preventing employees from stealing assets or committing fraud, internal controls can help improve operational efficiency by improving the accuracy and timeliness of financial reporting.The Sarbanes-Oxley Act of 2002, enacted in the wake of the accounting scandals in the early 2000s, seeks to protect investors from fraudulent accounting activities and improve the accuracy and reliability of corporate disclosures.


What Is the Definition of Checks and Balances in the U.S. Government?

Response: In the U.S. government, checks and balances refers to the separation of power in the government, which is ensured through the establishment of three different branches: the executive branch, the judicial branch, and the legislative branch. All hold different powers and, therefore, can check the power of the other branches.


Response: You can tell if a fund is open-end through the information provided in its prospectus or its website. You can also determine if it is open-ended in how it is priced, which would be its net asset value (NAV).


Response: The Keltner Channel is used to identify trade opportunities in swing action as prices move within an upper and lower band.


What happens if someone doesn’t pay their HOA fees?

Response: Property owners who don’t pay their monthly or annual fees, as well as any special assessments, may face action by the HOA. These actions depend on the contract between the HOA and the homeowner. Some allow the HOA to charge late fees, while others allow them to initiate a lawsuit, place a lien on the property, or foreclose on the owner’s property to collect the delinquent payments.


What Is the Bond Market and How Does It Work?

Response: The bond market is where various debt instruments are sold by corporations and governments. Bonds are issued to raise debt capital to fund operations or seek growth opportunities. Issuers promise to repay the original investment amount plus interest.


Response: Every NDA is unique so each one will last a different amount of time. Common timeframes range between one year to 10 years, however, depending on the information that is to be kept private, an NDA may be indefinite. For an NDA to be enforceable in certain states, it must not be too open-ended or generic, or the courts will throw it out.


Who Needs To Make Adjusting Journal Entries?

Response: Companies that use accrual accounting and find themselves in a position where one accounting period transitions to the next must see if any open transactions exist. If so, adjusting journal entries must be made accordingly.


Response: Bankruptcy is a legal process, so it begins when the debtor files a petition with the relevant bankruptcy court. This is often achieved through the help of a lawyer specialized in these types of cases.


How do you calculate gross domestic product (GDP) growth rate?

Response: The GDP growth rate, according to the formula above, takes the difference between the current and prior GDP level and divides that by the prior GDP level. The real economic (real GDP) growth rate will take into account the effects of inflation, replacing real GDP in the numerator and denominator, where real GDP = GDP / (1 + inflation rate since base year).


How Do You Calculate the Debt Service Coverage Ratio (DSCR)?

Response: The DSCR is calculated by taking net operating income and dividing it by total debt service (which includes the principal and interest payments on a loan). For example, if a business has a net operating income of $100,000 and a total debt service of $60,000, its DSCR would be approximately 1.67.


Response: Chapter 11 bankruptcy is typically used by businesses. Rather than have their assets liquidated and go out of business, as in a Chapter 7 bankruptcy, Chapter 11 allows them to reorganize under a court-appointed trustee's supervision and continue to operate. At the same time, they must agree to a plan to repay their creditors, typically over a period of several years.


What Is an Example of a Capital Investment?

Response: When a company buys land, that is often a capital investment. Because of the long-term nature of buying land and the illiquidity of the asset, a company usually needs to raise a lot of capital to buy the asset.


Response: Examples of bank credit include any money that a bank has loaned out to you. This includes mortgages, auto loans, personal loans, and credit cards. A bank credit is a loan made from a bank to a borrower that needs to be paid back.


Did the Smoot-Hawley Tariff Act Cause the Great Depression?

Response: The Smoot-Hawley Tariff Act did not cause the Great Depression; however, it worsened conditions during that time. The Act increased tariffs, which further stressed struggling nations—including those in debt to the U.S.—and caused other nations to retaliate by imposing their own tariffs. As a result, international trade decreased significantly.


Response: You can purchase cryptocurrency from popular crypto exchanges such as Coinbase, apps such as Cash App, or through brokers. Another popular way to invest in cryptocurrencies is through financial derivatives, such as CME's Bitcoin futures, or other instruments, such as Bitcoin trusts and ETFs.


What Is the Difference Between a CLO and a Collateralized Mortgage Obligation (CMO)?

Response: CLOs are similar to Collateralized Mortgage Obligations (CMOs), in that both securities are based on a large portfolio of underlying debt instruments. The main difference between them, however, is that CLOs are based on debts owed by corporations, whereas CMOs are based on mortgage loans. Both CLOs and CMOs are examples of credit derivatives.


What Is an Example of a DCF Calculation?

Response: You have a discount rate of 10% and an investment opportunity that would produce $100 per year for the following three years. Your goal is to calculate the value today—the present value—of this stream of future cash flows.Since money in the future is worth less than money today, you reduce the present value of each of these cash flows by your 10% discount rate. Specifically, the first year’s cash flow is worth $90.91 today, the second year’s cash flow is worth $82.64 today, and the third year’s cash flow is worth $75.13 today. Adding up these three cash flows, you conclude that the DCF of the investment is $248.68.


What Are the Disadvantage of a Free Trade Area?

Response: It can cause jobs to migrate to a country where the cost of production is lower, harm the growth of nascent industries that are just beginning to develop, allow an economy to become dependent on too few products, endanger security if a country becomes dependent on the importation of a vital resource, and lead to reduced environmental standards due to the need to compete with other countries that have lower standards.


Can I Use My Mobile Wallet on My Smartwatch?

Response: Many tech wearables are now capable of using mobile wallets. Depending on the device, it may come preloaded with a mobile wallet, such as Apple Pay on an Apple Watch.


Response: There is no federal agency for zoning, so who controls the zoning in your area depends almost entirely on where you live. It is controlled at the county level in some cases, at the city level in others. Sometimes zoning is decided by a zoning office, and sometimes it is controlled by a land use office.


How Do You Invest in the MSCI ACWI Index?

Response: You cannot directly invest in the MSCI ACWI index because it is only an index, not a fund. You can, however, invest in funds that track the index, such as the iShares MSCI ACWI ETF. You can purchase this ETF as you would any other stock or ETF through your brokerage account.


Does the Roth 5-Year Rule Apply for Those Aged 59½ or Older?

Response: Yes, the account must be five years old for earnings within a Roth IRA to be distributed without owing taxes or penalties even if you’re already 59½ years old.


Response: Form 1099-INT often reports taxable income earned during the year. This information is remitted to the IRS and must be included as ordinary income on your tax return. Disregarding tax-exempt income, taxpayers are required to report the contents of Form 1099-INT on their federal tax returns.


What Is the Best Asset To Trade Using Mean Reversion?

Response: The selection of an asset to trade using mean reversion is dependent on various factors such as market conditions, the entity's trading and investing expertise, and risk tolerance.Some commonly traded assets well-suited for mean reversion strategies include stocks, forex, commodities, exchange-traded funds (ETFs), and fixed income instruments.


Response: Public companies will send their proxy statements to the shareholders of record, either through the mail or electronically. You can usually find proxy statements on the company's website. In addition, public companies are also required to file their proxy statements with the Securities and Exchange Commission, or the equivalent regulator in the country where the company is domiciled.


What Is a Boilerplate Clause in a Contract?

Response: A boilerplate clause is a standard section of a contract that outlines certain conditions to which all parties must adhere. For example, it may describe how any problems and disputes will be resolved.


Do Nigerian Letter Scams Originate in Nigeria?

Response: Not necessarily. Of the Nigerian letter scam criminals who could be traced, 71% lived in the United States. Nigeria accounted for the next highest portion, at 8%.


What Is the World's Total GDP Per Capita?

Response: According to the World Bank, the total world's GDP per capita was $12,263 in 2021. With 7.9 billion people in the world in 2021, that amounts to a total global GDP of around $97 trillion.


How Is the Cost Basis of a Stock Determined?

Response: The cost basis of a stock is generally the amount you paid for your shares plus any dividends that you reinvested. In addition, you can add in any commissions or fees you paid as a part of those transactions. If you inherited the stock, its basis is whatever it was worth when the person who left it to you died.