Is It Better to Have a High or Low Asset Turnover?

Response: Generally, a higher ratio is favored because it implies that the company is efficient in generating sales or revenues from its asset base. A lower ratio indicates that a company is not using its assets efficiently and may have internal problems.


Response: Asset turnover ratios vary across different industry sectors, so only the ratios of companies that are in the same sector should be compared. For example, retail or service sector companies have relatively small asset bases combined with high sales volume. This leads to a high average asset turnover ratio. Meanwhile, firms in sectors like utilities or manufacturing tend to have large asset bases, which translates to lower asset turnover.


Response: Most statistical tests assume the independence of observations. In other words, the occurrence of one tells nothing about the occurrence of the other. Autocorrelation is problematic for most statistical tests because it refers to the lack of independence between values.


How Does Behavioral Finance View Asset Allocation?

Response: Behavioral finance explores how common cognitive errors might influence our financial choices. For our asset allocation, we might be swayed too much by recent market trends, overconfidence, sunk-cost reasoning, or loss aversion, which can lead to less beneficial allocation choices. Awareness of these cognitive biases can help you keep a disciplined, long-term approach aligned with your goals.


Response: The coupon rate of a bond is the stated amount of interest that the bond will pay an investor at the time of its issue. A bond's coupon rate is different from a bond's yield. A bond's yield is its effective rate of return when the bond's price changes. A bond's yield is calculated as coupon rate / current bond price.


How Do I Claim the American Opportunity Tax Credit?

Response: To claim the AOTC, complete Form 8863 and submit it with your Form 1040 or 1040-SR when filing your annual income tax return. Enter the nonrefundable part of the credit on Schedule 3 of your 1040 or 1040-SR, line 3. The refundable portion of the credit goes on line 29 of the 1040 or 1040-SR.


How Can I Use Anchoring to My Advantage?

Response: If you are selling something or negotiating a salary, you can start with a higher price than you expect to get as it will set an anchor that will tend to pull the final price up. If you are buying something or a hiring manager, you would instead start with a lowball level to induce the anchoring effect lower.


What Changes Can a Policy Owner Make to an Adjustable Life Policy?

Response: An adjustable life policy allows a policy owner to make changes to the death benefit amount, adjust their payment on their premiums, modify the guaranteed protection or premium payment periods, and add money to or remove funds from their cash value.


Why is Understanding Annualization Important when Determining Loan Costs?

Response: Understanding annualization allows borrowers to better understand the annual costs associated with a loan. Most lenders display an APR, which is the yearly rate of costs, such as fees and interest, expressed as a percentage of the amount borrowed.


Response: The formula for calculating APR is straightforward. It consists of multiplying the periodic interest rate by the number of periods in a year in which the rate is applied. The exact formula is as follows:APR=((Fees+InterestPrincipaln)×365)×100where:Interest=Total interest paid over life of the loanPrincipal=Loan amountn=Number of days in loan term\begin{aligned} &\text{APR} = \left ( \left ( \frac{ \frac{ \text{Fees} + \text{Interest} }{ \text {Principal} } }{ n } \right ) \times 365 \right ) \times 100 \\ &\textbf{where:} \\ &\text{Interest} = \text{Total interest paid over life of the loan} \\ &\text{Principal} = \text{Loan amount} \\ &n = \text{Number of days in loan term} \\ \end{aligned}APR=((nPrincipalFees+Interest)×365)×100where:Interest=Total interest paid over life of the loanPrincipal=Loan amountn=Number of days in loan term


Response: An adjudication results from any sort of official judgment or decision. For instance, when a judge levies a penalty or sentence against a defendant in court.


What Is the Difference Between APY and APR?

Response: APY calculates the rate earned in one year if the interest is compounded and is a more accurate representation of the actual rate of return. APR includes any fees or additional costs associated with the transaction, but it does not take into account the compounding of interest within a specific year. Rather, it is a simple interest rate.


How Long Was Alan Greenspan Federal Reserve Chair?

Response: Alan Greenspan served as Chair of the Fed from 1987 to 2006, for a total of five terms.


How Do You Calculate the Acid-Test Ratio?

Response: To calculate the acid-test ratio of a company, divide a company’s current cash, marketable securities, and total accounts receivable by its current liabilities. This information can be found on the company’s balance sheet.


How Does an IPO Determine the Allotment of Shares?

Response: Underwriters must determine how much they expect to sell before an initial public offering takes place by estimating demand. Once this is determined, they are granted a certain number of shares, which they must sell to the public in the IPO. Prices are determined by gauging demand from the market—higher demand means the company can command a higher price for the IPO. Lower demand, on the other hand, leads to a lower IPO price per share.


Response: Not anymore. According to the Internal Revenue Service, "Credit card and installment interest incurred for personal expenses," cannot be deducted on your tax return. Prior to tax reforms in 1986, however, it was deductible.


Response: An annuity table is a tool used mostly by accounting, insurance or other financial professionals to determine the present value of an annuity. It takes into account the amount of money that has been placed in the annuity and how long it's been sitting there, so as to decide the amount of money that should be paid out to an annuity buyer or annuitant.


Response: Foreign companies often seek to have their shares traded on U.S. exchanges through ADRs to obtain greater visibility in the international market, access to a larger pool of investors, and coverage by more equity analysts. Companies that issue ADRs may also find it easier to raise money in international markets when their ADRs are listed in U.S. markets.


How Can I See How Much of my Payment Is Interest?

Response: Most lenders will provide amortization tables that show how much of each payment is interest versus principle. You can also request this information from your lender.


What Are International Financial Reporting Standards (IFRS)?

Response: International companies follow the International Financial Reporting Standards (IFRS), which are set by the International Accounting Standards Board and serve as the guideline for non-U.S. GAAP companies reporting financial statements. They were established to bring consistency to accounting standards and practices, regardless of the company or the country. IFRS is thought to be more dynamic than GAAP in that it is regularly being revised in response to an ever-changing financial environment.


What Is a Liability in the Accounting Equation?

Response: A company's liabilities include every debt it has incurred. These may include loans, accounts payable, mortgages, deferred revenues, bond issues, warranties, and accrued expenses.


What Is Shareholders' Equity in the Accounting Equation?

Response: Shareholders' equity is the total value of the company expressed in dollars. Put another way, it is the amount that would remain if the company liquidated all of its assets and paid off all of its debts. The remainder is the shareholders' equity, which would be returned to them.


Response: An air waybill contains the names and addresses of the shipper and the recipient, the value of the cargo, three-letter codes for the origin and destination airports, the number of pieces, gross weight, description, special instructions, and other conditions of the contract.


Response: Annuities can be purchased with either pre-tax or after-tax dollars. A non-qualified annuity is one that has been purchased with after-tax dollars. A qualified annuity is one that has been purchased with pre-tax dollars. Qualified plans include 401(k) plans and 403(b) plans. Only the earnings (and not the contributions) of a non-qualified annuity are taxed at the time of withdrawal as they are after-tax money.


Response: The median annual pay for an accountant in the U.S. was $78,000 as of 2022, according to the Bureau of Labor Statistics.


Response: An accrued expense, also known as an accrued liability, is an accounting term that refers to an expense that is recognized on the books before it is paid. The expense is recorded in the accounting period in which it is incurred. Since accrued expenses represent a company's obligation to make future cash payments, they are shown on a company's balance sheet as current liabilities.


Response: ANOVA differs from T tests in that ANOVA can compare three or more groups while T tests are only useful for comparing two groups at one time.


Response: Yes, ANOVA tests assume that the data is normally distributed and that the levels of variance in each group is roughly equal. Finally, it assumes that all observations are made independently. If these assumptions are not accurate, ANOVA may not be useful for comparing groups.


Response: Not assumable means that the buyer cannot assume the existing mortgage from the seller. Conventional mortgages are non-assumable. Some mortgages have non-assumable clauses, preventing buyers from assuming mortgages from the seller.


Response: To assume a loan, you must qualify with the lender. If the price of the house exceeds the remaining mortgage, you must remit a down payment worth the difference between the sale price and the mortgage. If the difference is substantial, the buyer may need to secure a second mortgage.


How Does Depreciation Affect the Accounting Rate of Return?

Response: Depreciation will reduce the accounting rate of return. Depreciation is a direct cost and reduces the value of an asset or profit of a company. As such, it will reduce the return of an investment or project like any other cost.


Does the Always Be Closing Strategy Work?

Response: The Always Be Closing sales strategy certainly has its drawbacks. First, some people bolt at the first sign of aggressive sales tactics. Others can be bullied into a sale, but they may back out later if they can. Even if they don't, the Always Be Closing strategist is leaving behind a trail of dissatisfied customers. And that's bad for business.


Response: Yes, but it provides better strategy signals when combined with price. Investors should first use ADX to determine whether prices are trending or non-trending and then choose the appropriate trading strategy for the condition.


Response: While the Asian Infrastructure Investment Bank (AIIB) was launched on Chinese initiative, China only holds about 27% of the bank's voting shares. India is the next-largest shareholder with less than 8% of voting power.


Where Do I Find a Company's Accounts Payable?

Response: Accounts payable are found on a firm's balance sheet, and since they represent funds owed to others they are booked as a current liability.


Is It Better to Do Pre-Tax or After-Tax Contributions?

Response: Whether it is better to do pre-tax or after-tax contributions will depend on the individual and their financial circumstances. Generally, it is recommended that pre-tax contributions are better for higher-earners while after-tax contributions are better for lower-earners, particularly those who expect to be in a higher tax bracket when they retire.


Response: As every industry operates differently, every industry will have a different accounts payable ratio that is considered good. However, an AP ratio between six and 10 is considered ideal. A ratio below six indicates that a business is not generating enough revenue to pay its suppliers in an appropriate time frame.


What Is the Difference Between AGI and Modified Adjusted Gross Income (MAGI)?

Response: AGI and modified adjusted gross income (MAGI) are very similar except that MAGI adds back certain deductions. MAGI will always be larger than or equal to AGI for this reason. Common examples of deductions that are added back to calculate MAGI include foreign earned income, income earned on U.S. savings bonds, and losses arising from a publicly traded partnership.


How Should an Investor Interpret the Altman Z-Score?

Response: Investors can use Altman Z-score Plus to evaluate corporate credit risk. A score below 1.8 signals the company is likely headed for bankruptcy, while companies with scores above 3 are not likely to go bankrupt. Investors may consider purchasing a stock if its Altman Z-Score value is closer to 3 and selling, or shorting, a stock if the value is closer to 1.8. In more recent years, Altman has stated a score closer to 0 rather than 1.8 indicates a company is closer to bankruptcy.


Response: There are several types of ad valorem taxes. With property taxes, the most common ad valorem tax, taxes are assessed based on the value of your property. Then, specific tax rates are applied according. In the U.S., property taxes are generally assessed with a county tax rate. The value of the property is typically must be certified, such as by a state department of assessments and taxation.


How Long Should I Keep My Account Statements?

Response: The recommended duration for keeping account statements varies, but it's generally advised to retain them for a minimum of one to three years. However, consult with a financial advisor if you're unsure what account information should be retained especially related to tax statements, investment statements, or banking statements.


How Can I Use My Account Statements for Budgeting and Financial Planning?

Response: Account statements can be used for budgeting and financial planning by analyzing income, expenses, and patterns of spending. Review your statements to track where your money goes, identify areas for potential savings, and make informed decisions about budget adjustments or financial goals.


What Is Accidental Death and Dismemberment Insurance?

Response: Accidental death and dismemberment insurance covers you in the case of accidental death, or if you lose a limb (or other significant injuries) in an accident that causes you to stop working. Besides being dismembered, the insurance may include workplace injuries, injuries caused by a fire or flood, accidents with firearms, or a serious fall.


What's Needed To Open a Binary Options Trading Account?

Response: This typically involves choosing the broker, submitting an application, completing the Know Your Customer forms, funding the account, and verifying your identity for the broker.


Response: Once a bank draft is given to the person it was intended for, it cannot be cancelled. You, as the purchaser, are responsible for delivering the draft to the payee. If you lose it, you will have to take several steps to get a new draft, which may include providing a surety bond or signing an indemnity.


Response: The amount a bank draft will cost will vary by financial institution. Some may charge a flat fee while others may charge a percentage of the check amount. For example, TD Bank charges $9.95 for a bank draft.


Is a Back-to-Back Letter of Credit and Transferable Letter of Credit the Same?

Response: A back-to-back letter of credit is not the same as a transferable letter of credit. With a transferable letter of credit, the beneficiary can transfer the letter of credit's rights and protection to another party. The transferable letter of credit must be either issued as transferable or amended to make it transferable. A back-to-back letter of credit comprises two different letters of credit that are not transferrable.


Response: Best practices in education include staying proactive by ensuring your next teaching activity is prepared and set to go before the current one finishes. This allows students to be engaged by reducing disruptions. Encourage communication by involving students in the classroom setting. This can include varying the way in which they provide answers (e.g. verbal, written, visual, in groups, etc.). Work backward by setting an end goal and figuring out how to reach that goal with your students. Always keep your resources, such as lesson plans, so you can build upon what you have done before and refine the way you approach teaching. And lastly, be a role model by setting the examples you want your students to exhibit.


What Is Business-to-Consumer and How Does It Differ From Business-to-Business?

Response: After surging in popularity in the 1990s, business-to-consumer (B2C) increasingly became a term that referred to companies with consumers as their end-users. This stands in contrast to business-to-business (B2B), or companies whose primary clients are other businesses. B2C companies operate on the internet and sell products to customers online. Amazon, Meta (formerly Facebook), and Walmart are some examples of B2C companies.


Response: The boilerplate in a press release is often found at the bottom. The text briefly identifies and describes the company issuing the release and provides contact details for further information.


Response: Ratings are a forward-looking opinion rendered by rating agencies based on a close examination of a financial institution. As a consequence, there's no guarantee that a financial institution with an excellent rating won't default. That's why ratings should be just one of a variety of indicators of financial soundness that investors take into account before making investments.


Response: Prior to the 1929 stock market crash, margin trading encouraged speculation because traders were effectively able to make rapid gains with a relatively low investment. These gains encouraged more margin trading, creating a bubble that pushed asset prices higher. When the bubble collapsed, many of these margin traders owed money that they were not able to repay.


Response: Many experts agree that while Beta provides some information about risk, it is not an effective measure of risk on its own. Beta only looks at a stock's past performance relative to the S&P 500 and does not provide any forward guidance. It also does not consider the fundamentals of a company or its earnings and growth potential.


Response: There are several factors that can affect brand equity. One factor is the quality of products or services. Consumers are more likely to have a positive perception of a brand if they consistently provide high-quality products or services. Marketing and branding efforts are also important. Consistent and effective marketing and branding efforts can help build and maintain a positive brand image. Customer experiences also play a role in brand equity. Positive customer experiences can lead to increased loyalty and positive brand associations. The brand's reputation is also important, as consumers are more likely to choose a brand they perceive as trustworthy and reliable. Competition can also impact a brand's equity, as consumers may have multiple options to choose from. Finally, changes in consumer preferences or trends can affect a brand's equity, as consumers may shift towards different brands or products.


Response: To begin mining Bitcoin, you need to join a mining pool and install a mining client. Some pools have their own mining software; others only provide instructions on how to connect one of several mining clients. Mining pools share rewards based on the amount of work contributed, so the faster your computer or mining machine is, the more you'll receive. You can mine solo, but your chances of ever being rewarded are minuscule at best.


How Do You Read a Bar Chart for Trading?

Response: The range between the high price and low price of an asset is represented by the vertical height of a bar chart. This bar uses horizontal lines to note the opening and closing prices.


What Is an Example of a Bid-Ask Spread in Stocks?

Response: Consider the following example where a trader is looking to purchase 100 shares of Apple for $50. The trader sees that 100 shares are being offered at $50.05 in the market. Here, the spread would be $50.00 - $50.05, or $0.05 wide. While this spread may seem small or insignificant, on large trades, it can create a meaningful difference, which is why narrow spreads are typically more ideal. The total value of the bid-ask spread, in this instance, would be equal to 100 shares x $0.05, or $5.


What Are Internal Risks That Can Impact a Business?

Response: Internal risks that can impact a business often come from decisions made by the management or executive team in pursuit of growth. These decisions can create physical or tangible risks. For example, on-site risks such as fires, equipment malfunctions, or hazardous materials can jeopardize production, endanger employees, and lead to legal or financial penalties. Policies that guarantee a safe working environment would, in this instance, be an effective strategy for managing internal risks.


What are the main reasons why a company would issue bonus shares?

Response: Companies issue bonus shares to make their stock more attractive for retail investors, provide an alternative to a cash dividend, and/or reflect a position of financial health. In a nutshell, a company issues bonus shares to boost investment and reward shareholders.


Response: To place a buy limit order, you will first need to determine your limit price for the security you want to buy. The limit price is the maximum amount you are willing to pay to buy the security. If your order is triggered, it will be filled at your limit price or lower.You will also need to decide when your buy limit order will expire. You can choose to allow your order to expire at the end of the trading day if it is not filled. Alternatively, you can choose to place your order as good 'til canceled (GTC). Your order will remain open until it is filled or you decide to cancel it. Your brokerage may limit the time you can keep a GTC order open (usually up to 90 days).


Where are back offices physically located?

Response: Back offices used to be located literally behind the front office or trading desk. These days, many financial corporations have moved their back office locations to lower cost sites, such as Florida or North Carolina, where rents and salaries are generally lower than big cities like New York or Chicago.


What Impact Would Basel III Have on the Profits of the Big Banks?

Response: Given the millions the big banks are spending on commercials opposing Basel III Endgame, it's reasonable to assume they think it will hurt their bottom line. Higher capital requirements can affect bank profitability, as banks may need more capital in reserve instead of using it to generate returns. This could, in turn, influence bank stock valuations and dividend payouts, which would be scrutinized should they not meet some of the capital requirements. However, better-capitalized banks may be viewed as safer investments, which could attract more investors over the long term, and some research has suggested they could do better financially, too.


How Is a Long Call Butterfly Spread Constructed?

Response: The long call butterfly spread is created by buying a one in-the-money call option with a low strike price, writing (selling) two at-the-money call options, and buying one out-of-the-money call option with a higher strike price. Net debt is created when you enter the trade.The maximum profit is achieved if the price of the underlying asset at expiration is the same as the written calls. The max profit is equal to the strike of the written option, less the strike of the lower call, premiums, and commissions paid. The maximum loss is the initial cost of the premiums paid, plus commissions.


How Is a Long Put Butterfly Spread Constructed?

Response: The long put butterfly spread is created by buying one out-of-the-money put option with a low strike price, selling (writing) two at-the-money put options, and buying one in-the-money put option with a higher strike price. Net debt is created when entering the position. Like the long call butterfly, this position has a maximum profit when the underlying asset stays at the strike price of the middle options.The maximum profit is equal to the higher strike price minus the strike of the sold put, less the premium paid. The maximum loss of the trade is limited to the initial premiums and commissions paid.


Response: There are a variety of illegal markets and all of them work in different ways. An underground market can be a physical market where two individuals meet to exchange illegal goods, for example, a drug transaction on a street corner. An underground market can also exist online, such as on the dark web, where individuals communicate to exchange goods and payments are made in digital currencies.


Why Are Bond Prices Inversely Related to Interest Rates?

Response: A bond that pays a fixed coupon will see its price vary inversely with interest rates. This is because receiving a fixed interest rate, of say 5% is not very attractive if prevailing interest rates are 6%, and become even less desirable if rates can earn 7%. In order for that bond paying 5% to become equivalent to a new bond paying 7%, it must trade at a discounted price. Likewise, if interest rates drop to 4% or 3%, that 5% coupon becomes quite attractive and so that bond will trade at a premium to newly-issued bonds that offer a lower coupon.


Response: A leveraged buyout is when one company buys another using a large amount of borrowed money to fund the purchase. Often, the assets of the company being purchased are used as collateral for the loans taken out by the buyer.


What Is the Difference Between a Book Runner and a Lead Manager?

Response: A book runner is responsible for the entire underwriting process during the an IPO or a leveraged buyout. A lead manager is responsible for finding buyers for an IPO and ensure there are no barriers to the sale. These roles are often filled by the same firm.


Can You Trade Directly From a Bloomberg Terminal?

Response: Yes, you can place a wide range of order types and trade from the Bloomberg Terminal. The Bloomberg Terminal can serve as a complete end-to-end trading system across a wide range of markets and financial products, such as trading stocks and options.


Response: No. Individuals cannot purchase bank-owned life insurance for themselves. It is only for banks and corporations, who purchase it for specific employees, often executives.


Response: A breakeven point is used in multiple areas of business and finance. In accounting terms, it refers to the production level at which total production revenue equals total production costs. In investing, the breakeven point is the point at which the original cost equals the market price. Meanwhile, the breakeven point in options trading occurs when the market price of an underlying asset reaches the level at which a buyer will not incur a loss.


Response: BIN scamming is a fraud scheme. It occurs when a fraudster calls impersonating someone from your bank, claiming that your account information has been compromised. The scammer may give you information to try to gain your trust. Once you're hooked, they try to confirm the number of your card and begin by asking where you bank.When they have that information, they give you the bank identification number and ask that you confirm the remaining digits on the card along with any other information they can get from you.


Response: Bonds that are non-investment grade are considered to be high-yield or "junk" bonds. They are considered to be high-risk and usually have ratings of "BB+" to "D" or not rated. Investors can profit through buying junk bonds, but they also are at greater risk of losing their investment, as these kinds of companies tend to have liquidity issues.


Response: An official bank statement is typically sent by the bank to the account holder every month, summarizing all the account's transactions during the month. Bank statements contain bank account information, such as account numbers and a detailed list of deposits and withdrawals.


What Is the Difference Between a Bank Statement and a Transaction History?

Response: A transaction history displays all bank account transactions for a set period you choose. Typically, a bank statement only covers one month of transactions and may leave recent or pending transactions out.


What Are the Inputs for Black-Scholes Model?

Response: The inputs for the Black-Scholes equation are volatility, the price of the underlying asset, the strike price of the option, the time until expiration of the option, and the risk-free interest rate. With these variables, it is theoretically possible for options sellers to set rational prices for the options that they are selling.


Who Are the Parties to a Bill of Exchange?

Response: A bill of exchange transaction can involve up to three parties. The drawee is the party that pays the sum specified by the bill of exchange. The payee is the one who receives that sum. The drawer is the party that obliges the drawee to pay the payee. The drawer and the payee are the same entity unless the drawer transfers the bill of exchange to a third-party payee.


Why Is the Bandwagon Effect Important to Investors?

Response: The bandwagon effect can lead investors to follow the crowd, which may result in asset bubbles or crashes, depending on if the crowd is buying or selling. In either case, people may invest for fear of missing out (FOMO) rather than making individual evaluations of investments and doing due diligence. Buying or selling simply because everyone else seems to be doing it can lead to bad outcomes.


What Customer Tools Does Bloomberg Offer?

Response: Bloomberg provides technological tools for its clients. From the Bloomberg Terminal to flexible enterprise solutions, Bloomberg helps financial market players integrate their systems, and automate their workflows that inform their decision-making.


Response: With 2,700 journalists and analysts in 120 locations, Bloomberg publishes over 5,000 new stories a day across multiple platforms.


Response: You can get commercial insurance through an insurance agency that provides the type of policy you need. You can work with an insurance agent at an insurance company who can give you a quote and guide you through your options and application process. You can often get a policy online or by calling the insurance agency.


How Do Changes in Interest Rates Affect Bond Quotes?

Response: Changes in interest rates have an inverse relationship with bond prices. When interest rates rise, bond prices typically fall, and vice versa. These changes are reflected in bond quotes, with the quoted price decreasing or increasing in response to interest rate moves.


Response: A bull trap is the opposite of a bear trap, where traders might assume a downward trend is reversing and begin to take long positions, only to watch the market resume its downward trend.


Response: Bookies make money by charging a fee on each bet they take, known as the "vigorish" or the "vig,” and pay out money when their customers win a bet. Their goal, understandably, is to make sure that incomings exceed outgoings. That is generally achieved by adjusting the odds so that there’s an even amount of people betting on a win or loss.


What Are the Benefits of Bonus Depreciation?

Response: Bonus depreciation allows a taxpayer to reduce their short-term taxable income by the cost of depreciable assets. Bonus depreciation allows a taxpayer to deduct 100% of depreciation upfront on their Federal tax return. This accelerated depreciation method means a company may pay substantially fewer taxes in the tax year in which they claim bonus depreciation.


Response: A bill of materials shows the relationship between the finished product and its components. It's useful for estimating the cost of materials, planning purchases, ensuring availability of parts, and avoiding delays in production.


Response: When creating a bill of materials, include the following key components:Name of product or assemblyBOM levelRaw materials used, including quantity and unit of measureSub-assemblies usedPart number, name, and description for each partUnit costQuantity


How Much Crude Oil Does It Take to Make One Gallon of Gasoline?

Response: Crude oil is refined into various end products, including gasoline used in cars. Refineries use approximately 2.15 gallons of crude oil to generate one gallon of gasoline.


How Long Does It Take to Repair Bad Credit?

Response: This depends on how bad your credit score is to start. If you’re recovering from a bankruptcy, it can take years to build up a good credit score. However, paying down debt to decrease your credit utilization ratio can have an impact in as little as a couple of months. And be sure to keep paying your credit bills on time.


What Does a Bond's Yield Tell Investors?

Response: A bond's yield is the return to an investor from the bond's interest, or coupon, payments. It can be calculated as a simple coupon yield or using a more complex method like yield to maturity. Higher yields mean that bond investors are owed larger interest payments, but may also be a sign of greater risk. The riskier a borrower is, the more yield investors demand. Higher yields are often common with a longer maturity bond.


Response: The primary reason that brand loyalty is important is that it is a major driver of profitability: 65% of revenue in most companies comes from repeat business with existing clients—and existing customers loyal to brands purchase 90% more frequently than new customers,


Response: Business ethics concerns ethical dilemmas or controversial issues faced by a company. Often, business ethics involve a system of practices and procedures that help build trust with the consumer. On one level, some business ethics are embedded in the law, such as minimum wages, insider trading restrictions, and environmental regulations. On another, business ethics can be influenced by management behavior, with wide-ranging effects across the company.


Response: A balloon payment works like any other loan installment payment. The difference is that it is the final payment on the loan, and is substantially higher than the previous payments.A typical balloon loan requires only interest to be paid each month until the final month of the loan term. In the final month, the entire principal balance is due.The interest paid each month is typically a fixed amount as the principal balance does not change and the interest charged each month is not capitalized as part of the loan but instead paid off immediately.


What Are the 3 Principles of Investment According to Benjamin Graham?

Response: Benjamin Graham's main investment principles are:Invest with a margin of safetyAnticipate volatility and benefit from itKnow what type of investor you are and therefore what type of investing you are good at


Response: The phrase "a drop in the ocean" or "a drop in the bucket," refers to something that is a very small part of what is actually needed to accomplish something. An example might be if a person wants to buy a $500,000 home and all they have saved is $500, an amount that is 'a drop in the ocean.'


What Is the Difference Between Bookings and Billings?

Response: Bookings represent a customer's intent to commit to a purchase from your business. Billings represent the collection of your customer's money when the purchase is complete.


Should I Sell My Stocks During a Bear Market?

Response: For most investors, a buy-and-hold strategy is the best way to make money through investing, rather than rushing to buy or sell investments every time the market changes. If you have a balanced, diversified portfolio that includes assets such as government bonds, defensive stocks, and cash, as well as equities, you shouldn't need to sell during a bear market. Indeed, if you sell your stocks during a bear market because you are afraid of them dropping further, you may miss out on substantial profits when the market eventually rebounds.


What Happens If I Don't Choose a Beneficiary?

Response: If you don't choose one or more beneficiaries for your assets, then the decision about what happens to your money will be made by someone other than you, such as a financial institution or a court in the state in which you live.


Response: Stockbrokers make a solid income. With the average salary in the United States hovering around $58,000, the average salary of a stockbroker at around $73,000 is considerably higher. However, it is still a salary that might deflate those who dream of multi-million dollar


Response: Like any investment, the expected return of a bond must be weighed against its risk. The riskier the issuer, the higher the yield investors will demand. Junk bonds pay higher interest rates but are also at greater risk of default. U.S. Treasuries pay very low-interest rates but have low risk.


Can Investors Lose Money in the Bond Market?

Response: Yes. While not as risky as stocks, bond prices fluctuate and can go down. If interest rates rise, the price of a highly-rated bond will decrease. The sensitivity of a bond's price to interest rate changes is known as its duration. A bond will also lose significant value if its issuer defaults or goes bankrupt, and it can no longer repay in full the initial investment nor the interest owed.


Response: Yes. Black Monday caused about $500 billion in losses when the Dow Jones Industrial Index fell 508 points. In percentage terms, it is the biggest-ever one-day stock-market loss.


Response: Black Monday refers not only to the events on Oct. 19, 1987, but also to a number of specific Mondays when sudden, severe, and turbulent events have occurred, from military battles to massacres and stock market crashes. The term seems to have been coined by U.S. Representative John Bell Williams on the floor of Congress in Washington, D.C. on Monday, 17 May 1954. This was the date of the Supreme Court's decision in Brown v. Board of Education, in which the Court ruled that U.S. state laws establishing racial segregation in public schools were unconstitutional. In opposition to the decision, white citizens' councils were formally organized throughout the South to preserve segregation and defend segregated schools.


Response: The number of live blockchains is growing every day at an ever-increasing pace. As of 2023, there are more than 23,000 active cryptocurrencies based on blockchain, with several hundred more non-cryptocurrency blockchains.


What’s the Difference Between a Private Blockchain and a Public Blockchain?

Response: A public blockchain, also known as an open or permissionless blockchain, is one where anybody can join the network freely and establish a node. Because of their open nature, these blockchains must be secured with cryptography and a consensus system like proof of work (PoW). A private or permissioned blockchain, on the other hand, requires each node to be approved before joining. Because nodes are considered to be trusted, the layers of security do not need to be as robust.


Response: Different indexes use different methods to calculate their performance. For example, the S&P 500 uses a free-float market capitalization method.


Response: Power BI is a business analytics product offered by software giant Microsoft. According to the company, it allows both individuals and businesses to connect to, model, and visualize data using a scalable platform.


Response: The first step to determining a BATNA is to list all the possible courses of action that will be available if the negotiations fail.Next, evaluate the value of each alternative, and determine which ones are most attractive.Having calculated your BATNA, you can make a determination about the lowest-value deal you would be willing to accept.


Response: Yes, CoCos are regulated in the European Union under the Basel III regulatory framework. The framework sets minimum standards for the banking industry to improve supervision, risk management, and capital requirements.


What happens if no contingent beneficiary is named?

Response: If someone designates a beneficiary but no contingent beneficiary, and their primary beneficiary is deceased, the assets in question will be considered part of the estate and have to go through probate.


Response: Most companies around are B2C (business-to-consumer). This means that a business produces and markets a product for household consumption. This differs from B2B (business-to-business) or C2C (customer-to-customer).


Response: Cost per click is generally calculated by dividing the overall cost of your ads by the number of clicks your ads received.


Response: To calculate the equity in your home, simply subtract the mortgage balance owed from the market value of the property. For example, if your home is valued at $600,000 and you owe $200,000, then you have $400,000 in home equity.


Can a Cash Advance Impact my Credit Score?

Response: It can, indirectly. If you do not pay it back in a short period of time, it can raise the balance on your credit card which impacts your credit utilization rate.


Response: Collateral guarantees a loan, so it needs to be an item of value. For example, it can be a piece of property, such as a car or a home, or even cash that the lender can seize if the borrower does not pay.


What Is Involved in an Ethical Wall Process?

Response: An ethical wall can be created through the process of notifying upper management of any conflicts of interest and any related or external parties involved in the business. An ethical wall is then put in place to ensure that information remains confidential to the respective person or department, and is not disclosed to other parties. In this way, the other party should not have access to this information when there is a conflict of interest in order to protect the customer and prevent any action that could potentially lead to personal or corporate gain.


What Is the Difference Between a Code of Ethics and a Code of Conduct?

Response: A code of ethics is broader in its nature, outlining what is acceptable for the company in terms of integrity and how it operates. A code of conduct is more focused in nature and instructs how a business' employees should act daily and in specific situations, which links these to the values and principles of the organization.


Response: It depends. Providing or producing products for sale by consignment can mean a far bigger audience for your goods, and more sales. On the other hand, you'll have to pay a commission fee if you make a sale, and this can be a significant proportion of the value of the product.


Response: Traders and analysts may observe a variety of sentiment and technical indicators, such as the relative strength index, fibonacci ratios, candlestick patterns, and the moving average convergence-divergence, to determine when the buy or sell pressure for a certain asset is close to exhaustion. However, none of these methods is faultless, and the only 100% accurate way to identify capitulation is in hindsight.


Response: For crowdfunding that operates on a donation basis, the company does not need to pay back investors. However many companies offer incentives for early backers such as an advance copy of the product.


Why Is Cost Control Important for Businesses?

Response: In a competitive marketplace, the low-cost producers are the ones that can earn the highest profits. Reducing costs is therefore a key objective for most businesses since it increases both efficiency and profitability.


What Is a Disadvantage of Revolving Credit?

Response: If you don't use revolving credit like credit cards responsibly, you can potentially face financial hardship. If you don't make your minimum payments on time, your credit score will likely decline. And if you spend more than you can afford to pay back, your debt can quickly compound with interest.


Response: The effective yield is the return on a bond that has its coupon payments reinvested at the same rate by the bondholder. It is the total yield an investor receives, in contrast to the nominal yield—which is the coupon rate. Essentially, effective yield takes into account the power of compounding on investment returns, while nominal yield does not.


Who Is Credited With Inventing Conflict Theory?

Response: Philosophers and sociologists have long used conflict theory to analyze societies.Marxist conflict theory refers to conflict theory as put forward by the 19th-century political philosopher, who led the development of communism as a school of thought in economics. Karl Marx’s two most famous works are The Communist Manifesto, which he published in 1848; and Das Kapital, published in 1867. Although he lived in the 19th century, Marx had a substantial influence on politics and economics in the 20th century and is generally considered one of history’s most influential and controversial thinkers.


What Is the Largest Downside to a Capital Investment?

Response: Companies must often make a long-term financial or legal commitment when buying capital investments. This means tying up cash, getting rid of flexibility, and taking a risk that may not pan out. Whereas a company can be more nimble by paying for something smaller, a company aims to leverage a single investment to scale growth or innovate. That growth or innovation may not materialize.


When Is the Best Time to Put on a Protective Collar?

Response: If you own shares of a stock, collars are worthwhile if you maintain a moderately bullish outlook but are concerned about downside risks. It's often used by investors who have seen a significant appreciation of their stock's value and want to protect their gains against potential downturns, particularly if they are nearing a financial goal or require capital preservation. Collars also tend to work best when volatility is high.


Why Is Cash Flow From Investing Activities Important?

Response: Cash flow from investing activities is important because it shows how a company is allocating cash for the long term. For instance, a company may invest in fixed assets such as property, plant, and equipment to grow the business. While this signals a negative cash flow from investing activities in the short term, it may help the company generate cash flow in the longer term. A company may also choose to invest cash in short-term marketable securities to help boost profit.


How Can I Collect Income From Investing in Stocks?

Response: A stock is essentially an ownership interest in a company. You own a small percentage of the enterprise when you purchase one or more of its stocks. You'll receive monetary dividends as payment when and if the company does well. You can use them to reinvest and purchase more shares or you can take dividends as cash payments.You can also sell your stocks. You'll have capital gains income if you can sell your shares for more than your investment in them, including any trading fees.


What is the difference between counterparty risk and credit risk?

Response: Credit risk and counterparty risk are related but different. Credit risk is a particular type of risk referring to the chance of a loss as a result of a borrower’s failure to pay a loan. Typically, credit risk is associated with banks and other lending institutions. Counterparty risk, on the other hand, broadly refers to the risk of a loss as a result of any party defaulting in a transaction.


Response: This is the difference in basis points between a corporate bond and a U.S. Treasury bond with the same maturity. A single percentage point, or 1.00%, is equal to 100 basis points. So, if the corporate bond has a yield that is 2.00% higher than the Treasury bond, the credit spread would be 200 basis points.


Why Is the Price-to-Cash Flows Ratio Used?

Response: The price-to-cash flow (P/CF) ratio is a stock multiple that measures the value of a stock’s price relative to its operating cash flow per share. This ratio uses operating cash flow, which adds back non-cash expenses such as depreciation and amortization to net income.P/CF is especially useful for valuing stocks with positive cash flow but are not profitable because of large non-cash charges.


Response: What a good credit score is will ultimately be determined by the lenders. Ranges vary depending on the credit scoring model. Generally, credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and higher are considered excellent.


When Were Put Options First Listed on the CBOE?

Response: When the CBOE launched in 1973, it only listed call options. It was not until 1977 that the exchange added put options as well.


What Is the Difference Between a Limited Liability Company and a Corporation?

Response: Both a limited liability company (LLC) and a corporation are structures that offer similar legal advantages to their owners: they cannot be held liable for the debts of either entity.An LLC is a "pass-through" entity. That is, its profits and the responsibility to pay taxes on the profits are passed to the owners rather than being paid by the LLC.Establishing an LLC is a relatively straightforward process. By comparison, a corporation must elect a board of directors, conduct annual meetings, and adopt bylaws.


How Can I Invest in Consumer Discretionary Companies?

Response: You can buy the stocks of companies found in the various industries within the consumer discretionary sector. For convenience and diversification purposes, you can buy a mutual fund that invests in them, such as the Vanguard Consumer Discretionary Index Fund Admiral Shares. Additionally, you can purchase an exchange-traded fund that follows the sector, such as the Consumer Discretionary Select Sector SPDR® Fund.


How Do You Find a Cup and Handle Pattern?

Response: Consider a scenario where a stock has recently reached a high after significant momentum but has since corrected, falling almost 50%. At this point, an investor may purchase the stock, anticipating that it will bounce back to previous levels. The stock then rebounds, testing the previous high resistance levels, after which it falls into a sideways trend. In the final leg of the pattern, the stock exceeds these resistance levels, soaring 50% above the previous high.


How Can a Company Increase Its Competitive Advantage?

Response: Lasting competitive advantages tend to be things competitors cannot easily replicate or imitate. Warren Buffet calls sustainable competitive advantages economic moats, which businesses can figuratively dig around themselves to entrench competitive advantages. This can include strengthening one's brand, raising barriers to new entrants (such as through regulations), and the defense of intellectual property.


What Is the Job Outlook for Accountants and How Much Do They Earn?

Response: According to the Bureau of Labor Statistics, accountants earned an average of $77,250 annually in 2021. The industry is expected to grow 6% between 2021 and 2031 with an additional 81,800 jobs during that time.


What Is the Difference Between the Capitalization Rate and Return on Investment?

Response: Return on investment indicates what the potential return of an investment could be over a specific time horizon. The capitalization rate will tell you what the return of an investment is currently or what it should actually be.


What Is Included in the Cost of Goods Sold?

Response: Cost of Goods Sold represents the direct costs attributable to the production of goods sold by a company. It includes various costs directly associated with the production or acquisition of the goods that a company sells during a specific period. These costs typically include:Direct materialsDirect laborManufacturing overheadFreight and shipping costsDirect costs of production


Response: COGS does not include salaries and other general and administrative expenses; however, certain types of labor costs can be included in COGS, provided that they can be directly associated with specific sales. For example, a company that uses contractors to generate revenues might pay those contractors a commission based on the price charged to the customer. In that scenario, the commission earned by the contractors might be included in the company’s COGS, since that labor cost is directly connected to the revenues being generated.


Response: The cash ratio is one way to measure a company's liquidity. Liquidity is a measurement of a person or company's ability to pay their current liabilities. If a company has high liquidity, it is able to pay their short-term bills as they come due. If a company has low liquidity, it is going to have a more difficult time paying short-term bills.


Which Positions Are Part of the C-Suite?

Response: The C-suite refers to a company's top management positions, where the "C" stands for "chief." Various chief officers (e.g., CEO, CIO, CFO, etc.) are the occupants of the C-suite. These individuals, while highly paid and influential managers, are still employees of the firm. The number of C-level positions varies by firm, depending on variables such as a company's size, mission, and sector.


Which Is the Highest-Paid C-Suite Position?

Response: According to Salary.com, in 2024 the highest paid C-Suite positions and their median salaries were:CEO - $754,713COO - $457,468CFO - $363,559CITO - $266,171CTO - $234,700CMO - $230,735


Response: Ideally, a churn rate of zero would be the best churn rate, as that would indicate a business is not losing any subscribers; however, that is never the reality. A business will always lose subscribers for one reason or another.In this case, it is important to compare the churn rate of the business to its industry's average churn rate, taking into consideration if the business is new or mature. Knowing an industry's churn rate versus that of the business is the only way to understand if a churn rate is acceptable or poor. Every industry has a different business model and, therefore, will have different acceptable churn rates.


Response: A high churn rate indicates that a business is losing significant customers, certainly more than it is bringing in. This would mean that the business is doing something wrong, whether that be delivering a poor product, having poor customer service, or a host of other negative reasons that would explain why it is losing customers fast. A high churn rate would most likely mean a company is suffering significant losses.


Response: Calculating the current ratio is very straightforward: Simply divide the company’s current assets by its current liabilities. Current assets are those that can be converted into cash within one year, while current liabilities are obligations expected to be paid within one year. Examples of current assets include cash, inventory, and accounts receivable. Examples of current liabilities include accounts payable, wages payable, and the current portion of any scheduled interest or principal payments.


How Do Central Plans Work in a Command Economy?

Response: Communist nations with command economies are prone to introducing multi-year plans that are expected to result in improved conditions for all its people. China has had no fewer than 14 five-year plans, with the current one ending in 2025.Central plans generally set goals for each industry and establish strategies for every sector. Industries are required to participate in government objectives such as reducing carbon emissions or revitalizing rural economies.


How do I get a credit card if I don’t have any credit?

Response: Building credit history can be a bit of a catch-22. If you don’t have any credit, merchants or banks are less likely to extend credit to you since you’re an unproven borrower. Opening a secured credit card is one of the simplest ways to get started. Since spenders are only borrowing from the money they put down as a deposit, there is little risk for the lender, and it gives them a snapshot of your spending and repayment habits.Another way to start building credit is to become an authorized user on an established credit account, such as a parent or spouse. The cardholder’s credit history will appear on your account, adding longevity to your credit report. But be sure that the person with whom you partner has good credit habits. If their financial choices are poor, that will also reflect on you.


What is the difference between the transaction date and the posting date?

Response: The transaction date is the day of the purchase or payment using your card. These transactions will usually move into a pending category while the company processes the activity. The posting date is the day that the purchase or payment is added or deducted from your account balance.


What Is the Best Type of Core Competency?

Response: One type of core competency is not necessary better than the rest. However, some core competencies may be more difficult for other companies to overcome. For example, consider the Coca-Cola brand. The company's core competency of brand recognition may be very difficult for a new beverage company to overtake. However, Coca-Cola's approach to customer service or company culture may be easier for a competing company to overtake.


Response: Core competencies lead to operational excellence which leads to superior products, happier customers, and/or greater profitability. When a company is able to doing part of the sale process exceptionally well, it gains a positive reputation for its core competence. This reputation may lead to stronger sales, happier employees, and better business operations.


What Is Considered a High Rate of Unemployment?

Response: Unemployment rates that reach 10% are considered high. During the height of the COVID-19 pandemic, the unemployment rate reached 14.8%.


What Are the Steps of Creating a Cash Budget?

Response: The first step to creating a cash budget is to establish reliable forecasts of the company's cash inflows and outflows. Some of these flows will be predictable, such as rent and payroll costs. Others, like sales figures, will tend to be more variable. Once these figures have been estimated, it is possible to prepare a cash budget that accounts for all expected inflows and outflows.


What Expenses Should Be Included in a Cash Budget?

Response: A cash budget should take into account expected cash flows, such as revenue, as well as operational outflows due to returns, payroll, rent, utilities, supplies, and other costs of running the business.


What Is a Nationally Recognized Statistical Rating Organization?

Response: Nationally Recognized Statistical Rating Organizations (NRSROs) are credit rating agencies that are overseen by the Office of Credit Ratings (OCR) in the U.S. Securities and Exchange Commission.The OCR was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in the wake of the financial crisis of 2007-2008 to "enhance the regulation, accountability, and transparency" of the credit rating agencies.There are currently 10 NRSROs, of which the largest are Fitch Ratings, Moody's Investors Service, and S&P Global Ratings.


How Do I Use Common Stock to Vote at Company Meetings?

Response: Most ordinary common shares come with one vote per share, granting shareholders the right to vote on corporate actions, often conducted at company shareholder meeting. If you cannot attend, you can cast your vote by proxy, where a third party will vote on your behalf. The most important votes are taken on issues like the company engaging in a merger or acquisition, whom to elect to the board of directors, or whether to approve stock splits or dividends.


How Big Is the Chicago Mercantile Exchange?

Response: As of March 2022, the Chicago Mercantile Exchange reported almost $206 billion of total assets and just over $178 billion of liabilities. At the end of 2021, CME group had 3,480 employees and offices in more than 15 countries.


How Much Money Does the Chicago Mercantile Exchange Make?

Response: Through the first quarter of 2022, CME had generated $711 million of net income, approximately $136 million more than the same period last year. CME Group reported a net income of $2.6 billion in 2021, with total revenues of $4.7 billion.


Response: An example of communism would be a commune where people live together and share responsibilities and possessions. Many of these communities function well, although they do tend to be small in scale.


How Does Cross Elasticity of Demand Differ From Demand Elasticity?

Response: Cross elasticity looks at the proportional changes in demand among two goods. Demand elasticity (or price elasticity of demand) by itself looks at the change in demand of a single item as its price changes.


Why Would Investors Buy Convertible Preferred Stock?

Response: Convertible preferred stock offers the investor the benefits of both preferred stock and common stock. Investors get the stability, liquidation priority, and higher dividends of preferred stock, but they also have the option to convert their shares into common stock later if they believe that the price will go up.This conversion feature can generate a potentially higher return on investment than investors would get with traditional preferred stock, while also offering a level of flexibility that is not possible with either preferred stock or bonds.


Response: Because of how it is structured, capitalism will always pit business owners and investors (i.e., capitalists) against the working class. Capitalists are in competition against one another, and so will seek to increase their profits by cutting costs, including labor costs. At the same time, workers seek higher wages, fairer treatment, and better working conditions. These two incentives are fundamentally at odds, which creates class conflict.


Is Capitalism the Same as Free Enterprise?

Response: Capitalism and free enterprise are often seen as synonymous. In truth, they are closely related yet distinct terms with overlapping features. It is possible to have a capitalist economy without complete free enterprise, and a free market without capitalism. Any economy is capitalist as long as private individuals control the factors of production. However, a capitalist system can still be regulated by government laws, and the profits of capitalist endeavors can still be taxed heavily. "Free enterprise" can roughly be understood to mean economic exchanges free of coercive government influence.


Which Kinds of Cash Flows Show Up in Operations?

Response: Cash inflows and outflows from business activities such as buying and selling inventory and supplies, paying salaries, accounts payable, depreciation, amortization, and prepaid items booked as revenues and expenses.


What Is the Difference Between the Cost of Capital and the Discount Rate?

Response: The two terms are often used interchangeably, but there is a difference. In business, the cost of capital is generally determined by the accounting department. It is a relatively straightforward calculation of the breakeven point for the project. The management team uses that calculation to determine the discount rate, or hurdle rate, of the project. That is, they decide whether the project can deliver enough of a return to not only repay its costs but reward the company's shareholders.


Response: The master of business administration (MBA) is an academic degree in management. If you are interested in starting or running a business, the MBA program will help you prepare.The certified public accountant (CPA) is a license for working accountants that signals a degree of professional expertise. If you are an accountant or want to be one, it's a valuable tool to help you move up the ladder.


Response: A credit facility is a way for a company to take on debt. It's an agreement between a company and a lender that, should the company need funds, it can draw on the facility and borrow money. Just because a company has a credit facility doesn't mean it has incurred debt. A credit facility simply grants the company the right to take on loan funds.


Response: Yes, cost of revenue is an accumulation of the costs necessary to generate income specific to a product. Be mindful that some aspects of cost of revenue (i.e. returns or warranties) may be reported as contra revenue accounts.


How Do Businesses Choose Which CRM to Go With?

Response: Today, there are several vendors of CRM platforms, so choosing a CRM boils down to cost, service, and functionality. That means you want the best bang for your buck, and not to spend extra money on added features that you won't use. Establish a budget that revolves around the business' goals and then select the features or functions that you require. Then, shop around and research vendors' customer reviews and feedback.


Response: The major U.S. commodity exchanges are ICE Futures U.S. and the CME Group, which operate four major exchanges: the Chicago Board of Trade (CBOT), the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYMEX), and the Commodity Exchange, Inc. (COMEX). There are also major commodities exchanges located around the world.


What Factors Can Lenders Consider When Making Loans?

Response: Lending institutions can only consider factors relevant to an applicant's creditworthiness (their ability to pay). It's illegal for lenders to consider factors that are unrelated to creditworthiness, including the applicant's race, color, religion, national origin, sex, marital status, age, and participation in public assistance programs.


What's the Difference Between Net Income and Comprehensive Income?

Response: Net income is the actual profit or gain that a company makes in a particular period. Comprehensive income is the sum of that net income plus the value of yet unrealized profits (or losses) in the same period.


What Is a Simple Definition of Compound Interest?

Response: Compound interest simply means you're earning interest on both your original saved money and any interest you earn on that original amount. Although the term "compound interest" includes the word interest, the concept applies beyond interest-bearing bank accounts and loans, including investments such as mutual funds.


Are CML and Security Market Line (SML) the Same?

Response: The CML is sometimes confused with the security market line (SML). The SML is derived from the CML. While the CML shows the rates of return for a specific portfolio, the SML represents the market’s risk and return at a given time, and shows the expected returns of individual assets. And while the measure of risk in the CML is the standard deviation of returns (total risk), the risk measure in the SML is systematic risk or beta.


Response: Startup companies generally have only a small number of equity owners. These often include the founders, friends and family of the founders, and angel investors. Keeping track of who owns what stake in the new company is important as it grows and raises capital from other sources such as venture capitalists, and ultimately to the public via an IPO. The cap table will be updated after each subsequent funding round, showing how ownership becomes diluted and spread across new owners as it grows.


What Information Does the Cap Table Keep Track of?

Response: The cap table will keep track of stock ownership as well as convertible securities, warrants and options, and stock compensation grants. This allows for a fully-diluted picture of equity ownership. The cap table will show who owns how many shares (or rights), the current market value, and the proportion of the ownership as an overall percentage,


Response: CUSIP numbers are unique identifiers attached to listed stocks and bonds. They provide a standardized method for identifying securities to facilitate the clearance and settlement of trading market transactions.


Response: A contract can outline any covenant one party wishes to require as long as the other party agrees to its compliance. As part of the contracting stage, the two parties must communicate their requirements and negotiate what to include and exclude in a contract. The covenants listed from one contract to another may be entirely different, as different parties may wish to be protected in different ways.


Response: eBay features a Cross-Promotion Connections program whereby eBay sellers can connect with each other. When a buyer wins a bid, they are able to see the seller's other listings, as well as their connections listings. Previously, eBay featured a no-cost Cross-selling tool that allowed sellers to promote related products. Sellers could choose to either promote related items or promote discounts for larger orders. This feature was discontinued and is only allowed for select users at certain times.


What Are Examples of Consumer Packaged Goods?

Response: Consumer packaged goods are bought, consumed, and replenished quickly and regularly. Examples are food, beverages, tobacco products, cosmetics, toilet paper, shampoo, cleaning supplies, and other household items.


Response: It normally takes one to three days for a direct deposit to process. Sometimes the payment will show up right away with a “pending” designation until it's finalized.


Do Debt Collectors Report Information to Credit Bureaus?

Response: Yes, a debt collector may report a debt to the credit bureaus, but only after it has contacted the debtor about it. The delinquent debt may also be reflected on the person's credit report under the name of the original creditor. Both can remain on credit reports for up to seven years and have a negative effect on the individual's credit score, a large portion of which is based on their payment history.


Response: Covariance is a statistical measure of the directional relationship between two asset returns. Finding that two stocks that have a high or low covariance might not be a useful metric on its own. Some investors may choose to supplement their analysis by looking at the dispersion of returns, or correlation before deciding to invest.


Response: The most common example of a debt security is a bond, whether that be a government bond or corporate bond. These securities are purchased by an investor and pay out a stream of income in the form of interest payments. At the bond's maturity, the issuer buys back the bond from the investor.


Response: The most common issuer of debt securities are corporations and governments. Both issue debt securities to raise money: governments to finance projects or for day-to-day operations and corporations to fund growth, pay down other debt, and also to finance day-to-day operations.


Response: A payor, or drawer, is the person with the money who issues a check. The drawee is the entity that honors the check and distributes funds to the person who presents, and is identified by, the check.


Response: Depreciation is an accounting process by which a company allocates an asset's cost throughout its useful life. In other words, it records how the value of an asset declines over time. Firms depreciate assets on their financial statements and for tax purposes in order to better match an asset's productivity in use to its costs of operation over time.


What Is the Opposite of a Dead Cat Bounce?

Response: An inverted dead cat bounce is a temporary and often severe sell-off during an otherwise secular bull market. It has many of the characteristics of a dead cat bounce, but in reverse.


Response: No, the double-top pattern is not regarded as bullish. The pattern on the chart is bearish and points to a possible trend change from an uptrend to a downtrend.


Response: The dotcom bubble lasted about two years between 1998 and 2000. The time between 1995 and 1997 is considered to be the pre-bubble period when things started to heat up in the industry.


How Do Donchian Channels Differ From Other Moving Average Indicators?

Response: Donchian channels, unlike standard moving average indicators, focus on the highest and lowest price points over a set time frame. While moving averages give a smoothed average price trend, Donchian channels create a band enclosing the extreme highs and lows. This can be particularly useful for identifying breakout points and the size of volatility.


Response: While some day traders can make money, studies suggest that the majority either lose money or underperform the market. Studies by professional economists suggest that most day trading strategies are no more effective than random chance.


What Are the Tax Implications of Day Trading?

Response: Intraday trades are considered short-term capital gains, meaning that they are taxed at the same level as your income. You are required to pay taxes on each profitable trade, but you can use your losing trades to offset the taxes on your gains. You can also use up to $3,000 of losses to offset income tax on your salary, and carry over additional losses to the next tax year.


Response: Implementing data analytics into the business model means companies can help reduce costs by identifying more efficient ways of doing business. A company can also use data analytics to make better business decisions.


What Is a Small Business Case in Bankruptcy?

Response: A small business case is a type of simplified Chapter 11 bankruptcy for businesses with debts of $3,024,725 or less. It was created by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005. Small businesses that qualify can use either it or the more recent Subchapter V.


Response: Subchapter V is a special category of Chapter 11 for small businesses created in 2019 by the Small Business Reorganization Act (SBRA). Its goal is to speed up and streamline the bankruptcy process for businesses that qualify, currently those with debts of $7.5 million or less.


What Skills Are Needed in Digital Marketing?

Response: Strong communication skills are essential if a marketer is going to be successful in telling a company or product's story to potential customers. Data analytics skills are also important for understanding how well a marketing campaign is performing and where it might be improved. Finally, social media skills are another must.


What Is Implicit Bias in Digital Marketing?

Response: Implicit bias, also known as unconscious bias, refers to messages that unintentionally convey negative stereotypes or derogatory attitudes toward certain groups. In recent years it has come in for particular notice in the fields of advertising and marketing. In digital marketing it may manifest itself in something as simple as the choice of stock photos for a marketing campaign. For instance, without even thinking about it, companies may use images of only heterosexual White individuals while excluding Black, Indigenous, and other people of color, along with those of different body types and abilities. While digital marketers often use supposedly unbiased algorithms to help craft their campaigns, those algorithms are created by human beings who may bring their own unconscious biases to them.


What Are the Types of Discrete Distribution?

Response: The most common discrete distributions used by statisticians or analysts include the binomial, Poisson, Bernoulli, and multinomial distributions. Others include the negative binomial, geometric, and hypergeometric distributions.


How Does the Debt-to-Income Ratio Differ from the Debt-to-Limit Ratio?

Response: Sometimes the debt-to-income ratio is lumped in together with the debt-to-limit ratio. However, the two metrics have distinct differences. The debt-to-limit ratio, which is also called the credit utilization ratio, is the percentage of a borrower’s total available credit that is currently being utilized. In other words, lenders want to determine if you're maxing out your credit cards. The DTI ratio calculates your monthly debt payments as compared to your income, whereby credit utilization measures your debt balances as compared to the amount of existing credit you've been approved for by credit card companies.


Response: A good or bad DSO ratio may vary according to the type of business and industry that the company operates in. That said, a number under 45 is considered to be good for most businesses. It suggests that the company's cash is flowing in at a reasonably efficient rate, ready to be used to generate new business.


Response: You can access the dark web by installing specific, anonymous browsers, such as TOR. Once installed, the browser works the same way traditional ones do. But it can be a little difficult to access information because it doesn't use an index to locate the desired information. Make sure that you install security software to make sure your computer and personal information are ketp safe.


Response: A default is a missed payment or multiple missed payments on money that you've borrowed. An example of a default would be not paying your credit card bill or your monthly mortgage payment.


What does tulipmania have to do with market bubbles?

Response: Tulipmania reflects the general cycle of a bubble, from the irrational biases and group mentalities that push up prices of an asset to an unsustainable level, to the eventual collapse of those inflated prices. The example of tulipmania is now used as a parable for other speculative assets, such as cryptocurrencies or dotcom stocks.


What Is the Difference Between Single-Entry Accounting and Double-Entry Accounting?

Response: In single-entry accounting, when a business completes a transaction, it records that transaction in only one account. For example, if a business sells a good, the expenses of the good are recorded when it is purchased the good, and the revenue is recorded when the good is sold. With double-entry accounting, when the good is purchased, it records an increase in inventory and a decrease in assets. When the good is sold, it records a decrease in inventory and an increase in cash (assets). Double-entry accounting provides a holistic view of a company's transactions and a clearer financial picture.


What Is the Difference Between DPO and DSO?

Response: Days payable outstanding (DPO) is the average time for a company to pay its bills. By contrast, days sales outstanding (DSO) is the average length of time for sales to be paid back to the company. When a DSO is high, it indicates that the company is waiting extended periods to collect money for products that it sold on credit. By contrast, a high DPO could be interpreted multiple ways, either indicating that the company is utilizing its cash on hand to create more working capital, or indicating poor management of free cash flow.


What Is the Economic Theory of David Ricardo?

Response: David Ricardo, although well known for his vast contributions to economics, is best known for developing the comparative advantage economic theory. Comparative advantage theorizes that, for international trade, countries most benefit from producing goods with low production opportunity costs.


Response: Debt is anything owed by one party to another. Examples of debt include amounts owed on credit cards, car loans, and mortgages.


Which Stock Has the Highest Dividend Yield?

Response: This will depend on the timeframe you look at. Dividend yields change daily as the prices of shares that pay dividends rise or fall. Some stocks with very high dividend yields may be the result of a recent downturn in share price, and oftentimes that dividend will be slashed or eliminated by the managers if the stock price does not soon recover.


Response: The grantor is responsible for paying taxes on a dynasty trust. The beneficiaries pay income taxes if they receive income from the trust, and generation-skipping taxes are deferred until the trust terminates and the final beneficiaries receive the remaining assets.


Response: If a company has a negative debt ratio, this would mean that the company has negative shareholder equity. In other words, the company's liabilities outnumber its assets. In most cases, this is considered a very risky sign, indicating that the company may be at risk of bankruptcy.


Response: The overall goal of the Dow Theory is to identify the market's primary trend through proof and confirmation.


Response: The Dow Jones Industrial Average, known as the Dow, is affected by the prices of the stocks that make up the index. Stock prices are affected by many factors.


Response: A debt-to-income (DTI) ratio is similar to a debt-service coverage ratio, although typically used in personal (nonbusiness) borrowing. The DTI ratio measures an individual’s ability to service their debts by dividing their gross income by their debt obligations for the same time period. For example, someone who earns $5,000 a month and pays $2,000 a month on their mortgage will have a DTI of 40%. An acceptable DTI will vary from lender to lender and according to the type of loan product.


Is Discounted Cash Flow the Same As Net Present Value (NPV)?

Response: No, it's not, although the two concepts are closely related. NPV adds a fourth step to the DCF calculation process. After forecasting the expected cash flows, selecting a discount rate, discounting those cash flows, and totaling them, NPV then deducts the upfront cost of the investment from the DCF. For instance, if the cost of purchasing the investment in our above example were $200, then the NPV of that investment would be $248.68 minus $200, or $48.68.


How Do You Calculate Depreciation Recapture?

Response: Depreciation recapture is calculated by subtracting the adjusted cost basis from the sale price of the asset. The adjusted cost basis is the original price paid to acquire the asset minus any allowed or allowable depreciation expense incurred. If, for example, the adjusted cost basis is $2,000 and the asset is sold for $3,000, there is a gain of $1,000 to be taxed. The rate it will be taxed depends on the taxpayer’s income tax rate and whether the asset is real estate.


What Are the Key Requirements for Disruptive Innovation?

Response: To be a successful disruptor, the network of partners—suppliers, contractors, and distributors—must also benefit from the new business model. Certain core requirements include having enabling technology, an innovative business model, and a coherent value network where upstream and downstream business partners benefit from a successful disruption.


Response: Yes, it is; however, its regulatory strength was diluted with the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. Still, certain aspects, such as the bank stress tests it called for, are in use today. The Federal Reserve publishes stress test results regularly.


Response: The long-legged doji is a type of candlestick pattern that signals to traders a point of indecision about the future direction of a security’s price. This doji has long upper and lower shadows and roughly the same opening and closing prices. In addition to signaling indecision, the long-legged doji can also indicate the beginning of a consolidation period where price action may soon break out to form a new trend. These doji can be a sign that sentiment is changing and that a trend reversal is on the horizon.


How Often Are Dividends Distributed to Shareholders?

Response: Dividends are commonly distributed to shareholders quarterly, though some companies may pay dividends semi-annually. Payments can be received as cash or as reinvestment into shares of company stock.


Response: It is called Dow 30 because it was created by Charles Dow and consists of 30 companies.


What Are Some Examples of Indirect Taxes?

Response: Common examples of indirect taxes include sales tax, excise tax, value-added tax (VAT), and goods and services tax (GST). Often, businesses get individual consumers to foot the bill and cover these costs by charging higher prices.


Response: Data mining also goes by the less-used term "knowledge discovery in data," or KDD.


Response: Economically speaking, the principle of demand has importance for both consumers and businesses that sell products and/or services. For businesses, understanding demand is vital when making decisions about inventory, pricing, and aiming for a particular profit. Consumers who have an understanding of demand can make confident decisions about what products to buy and when to buy them.


Response: A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet.


Is a Retirement Drawdown the Same As a Stock Drawdown?

Response: No. While a stock drawdown refers to the decline of a stock from its peak before it hits that peak again, a retirement drawdown is different. A drawdown in retirement is the receipt of income during retirement. Retirees take out a certain portion of their retirement savings to maintain a certain standard of living. This is commonly known as a drawdown percentage. Drawing down too much means a retiree may struggle financially while drawing down too little means they may leave money behind after they die.


What Would Happen If There Were No Federal Regulations in the U.S.?

Response: Hazards would increase for people taking medicine, driving cars, eating food, and using other consumer products that were no longer subject to regulated safety standards.Workplaces would lack safe environments or conditions. Weekends and overtime might be eliminated, forcing employees to work long hours or face the prospect of losing their jobs. For example, rivers and other bodies of water could become heavily polluted and even catch fire, as they did before the passage of the Clean Water and Environmental Protection acts in 1970.


Response: Whether or not dividends grow every year will depend on the company. Generally, well-established companies that pay dividends will ensure that dividends grow every year; however, it is not guaranteed that dividends grow every year.


Can You Have Deferred Revenue in Accrual Accounting?

Response: No, accrual accounting records revenue for products or services that have been delivered before payment has been received. In a way, this is the opposite of deferred revenue, which records revenue for services or products yet to be delivered. Accrual accounting records revenue for payments that have not yet been received for products or services already delivered.


How Does Tax Deadweight Loss Relate to Economic Efficiency?

Response: Tax deadweight loss is a measure of the efficiency loss in a market due to taxes. When taxes are introduced, they somewhat mess up the natural order of markets. This is because they change the way consumers interact with goods and make decisions. All else being equal, the most inefficient taxes will have the largest deadweight losses as they will prove to drive the most consumers away from favorable economic activity.


What Does Equilibrium Price Mean in Economics?

Response: Economic equilibrium as it relates to price is used in microeconomics. It is the price at which the supply of a product is aligned with the demand so that the supply and demand curves intersect.


Why Does the Stock Price Fall on the Ex-Dividend Date?

Response: The price of a stock tends to fall by the amount of the dividend on its ex-dividend date, reflecting that its assets will soon be dropping by the amount of the dividend.


What Is the Difference Between Excess and Required Reserves?

Response: Required reserves are the amount of capital a nation's central bank makes depository institutions hold in reserve to meet liquidity requirements. Excess reserves are amounts above and beyond the required reserve set by the central bank.


Response: Taxes affect economic growth, at least in the short term, through their impact on demand. A tax cut increases demand by raising personal disposable income and encouraging businesses to hire and invest. However, the size of the effect is dependent on the strength of the economy. If it is operating close to capacity, the effect is likely to be small. If it is operating significantly below its potential, the impact will be more pronounced. The Congressional Budget Office (CBO) estimates that the effect is three times larger in the latter case than in the former.The CBO also found that tax cuts are generally not as effective in stimulating economic growth as government spending increases. That is because most of the spending boosts demand, while tax cuts boost savings as well as demand. One way to mitigate this effect is to target tax cuts to lower- and middle-income households, which are less likely to put the money into savings.


Is an Investment In Another Company the Same As an Acquisition?

Response: One company can invest in another at any amount, and it is not always considered an acquisition. It is considered an acquisition if a company buys most or all of another company's shares (50% or more) because the investor has effectively gained control of the investment company. However, an investor company can still exert significant influence even if it owns less than 50% of the investee's shares.


What Is the Relationship Between Neoclassical Economics and Environmental Economics?

Response: Neoclassical economics is a broad theory that focuses on supply and demand as the driving forces of economic activity. Environmental economics is based on the neoclassical model but places a greater emphasis on negative externalities, such as pollution and ecosystem loss.


Response: Income from municipal bonds and distributions from Roth 401(k)s and Roth IRAs are tax-exempt.Income from employer-sponsored benefits—including supplemental disability insurance and most benefits from employer-sponsored health insurance plans—are exempt.


What Is the Difference Between E-commerce and E-business?

Response: E-commerce involves the purchase and sale of goods and services online and is actually just one part of e-business. An e-business involves the entire process of running a company online. Put simply, it's all of the activity that takes place with an online business.


What Is the Most Important Economic Indicator?

Response: Every economist may come up with their own favorite economic indicator. For many, a country's GDP usually represents the best overall picture of a country's economic health. It combines the monetary value of every good and service produced in an economy for a certain period, and it considers household consumption, government purchases, and imports and exports.


Response: Yes, inflation is a lagging indicator that is reported after a rise in prices has occurred. This type of economic indicator is helpful for government agencies to set public policy, as without this type of data, they would not know the direction of the economy. Therefore, while inflation and other lagging indicators are still useful to investors, they are especially critical for developing future policy responses.


Response: Traders and investment professionals may use economic indicators to predict how broad economic policy will impact their trades or investment strategy.


How Do You Find a Proxy Document in the EDGAR Database?

Response: One can find a proxy filing, or any other public filing, by searching the EDGAR database by company name. The search results may need to be refined with additional specifications like filing date or category. Proxy statements are filed under form 14K.


Response: The Engel coefficient, based on Engel's Law, is a commonly used measure of a nation's standard of living. Some countries also use it to set their poverty line. The coefficient is arrived at by dividing food expenditures by total expenditures.


Response: An end-to-end product is an item that manages the full development process of a new product from the start of development through final delivery to customers. The end-to-end process may incorporate multiple departments, but it refers to the full span of activities needed from start to finish to furnish the final deliverable.


Response: Yes, salary is considered an expense and is reported as such on a company's income statement.


Response: Pure economic justice is a rarity. Many developed economies offer some form of welfare and implement a progressive taxation system to ensure that bigger earners contribute more to public finances. However, in most of these countries, inequality is still widespread. Loopholes that favor the wealthy undermine attempts to reduce inequality, and big businesses often threaten to relocate elsewhere if forced to share a greater portion of their earnings with employees.


What Is the Penalty for Violating the Equal Credit Opportunity Act (ECOA)?

Response: Lenders found in violation of ECOA can potentially face class-action lawsuits from the Department of Justice (DOJ) if the DOJ or any affiliate agencies recognize a pattern of discrimination. The Consumer Financial Protection Bureau enforces ECOA with other federal agencies. If found guilty, the offending organization could have to pay out punitive damages that can be significant and cover any costs incurred by the wronged party.


How Does Inflation Impact the Sustainability of Economic Recovery?

Response: Inflation impacts the sustainability of economic recovery by influencing purchasing power and consumer confidence. Moderate inflation can be a sign of a healthy economy, but excessive inflation may erode the value of money, leading to decreased consumer spending. When excessive inflation occurs, the government may also decide to pull back some favorable policies, meaning the economy is somewhat likely to slow (and thus risks recovery).


What Is the Difference Between Interest Earned and Interest Rate?

Response: The interest rate is a percent of your total deposits, paid to you as interest earned.


Will I a Get Dividend If I Sell Before the Ex-Date?

Response: No, you won't get the dividend if you sell before the ex-date, because you would not be recorded as an investor entitled to dividends on the record date. You'll need to hold the shares until the ex-date or later to receive the payout.


How Do Equity Funds Provide Diversification?

Response: Equity funds provide diversification by investing in a wide range of stocks across different sectors and industries. By spreading investments among companies, funds reduce the impact of any single stock's poor performance on the overall portfolio. This diversification reduces the unsystematic risk associated with investing in individual stocks, as the success or failure of one company has a limited effect on the fund as a whole.


Response: Implicit costs are not clearly defined and don’t get reported as expenses. When a company allocates its resources, it forgoes the ability to earn money off the use of those resources elsewhere. It is the cost of the use of an asset.


Response: Escrow relating to mortgages involves property tax and insurance payments. This escrow account can last for the length of a mortgage loan. Lenders don't always require escrow. However, if you are required to set up an escrow account, many lenders will consider a written request to end escrow after you've made, typically, a year of on-time mortgage payments and your loan-to-value is at most 90% — some lenders may require 80% or lower.


What Is Excluded From Employers' Liability Insurance?

Response: There are a number of circumstances not covered by Employers' liability insurance including criminal acts, fraud, illegal profit, violation of the law and any claims that are the result of downsizing, layoffs, restructurings, mergers or acquisitions.


Which Is Lower: the Effective Tax Rate or the Marginal Tax Rate?

Response: An individual's effective tax rate is lower than the marginal rate. That's because the marginal tax rate breaks up your income into different levels. The first level of income incurs a lower tax rate while higher levels of income are taxed at the highest rate. Any amounts that fall in between are charged taxes based on levels in between.


What are common exit strategies used by startups?

Response: Exit strategies used by early-stage companies include initial public offerings (IPOs), strategic acquisitions, and management buyouts (MBOs). Entrepreneurs typically select an exit plan before launching a business that fits their longer-term business development decisions and goals. The exit strategy that an entrepreneur chooses depends on factors such as how much involvement they want to retain in the business and its future long-term potential.


What are common exit strategies used by established companies?

Response: More established companies favor mergers and acquisitions as an exit strategy because it often leads to a favorable deal for shareholders, particularly if a rival company wants to increase its market share or acquire intellectual property. Larger companies may exit a loss-making business by liquidating their assets or declaring bankruptcy.


Response: A nominal interest rate does not consider any fees or compounding of interest. It is often the rate stated by financial institutions.


Response: It is better for savers/investors to have a higher EAR, though it is worse for borrowers to have a higher EAR. In either situation, the EAR will likely be higher than the nominal rate; it may be more strategic to understand how the EAR has changed in recent history and what future trends look like when evaluating future transactions.


What Are the Different Types of Equity Financing?

Response: Companies use two primary methods to obtain equity financing: the private placement of stock with investors or venture capital firms and public stock offerings. It is more common for young companies and startups to choose private placement because it is more straightforward.


Response: The most important benefit of equity financing is that the money does not need to be repaid. However, the cost of equity is often higher than the cost of debt.


What Is Autocorrelation in Econometrics?

Response: Autocorrelation measures the relationships between a single variable at different time periods. For this reason, it is sometimes called lagged correlation or serial correlation, since it is used to measure how the past value of a certain variable might predict future values of the same variable. Autocorrelation is a useful tool for traders, especially in technical analysis.


What Is the Difference Between Linear Growth and Exponential Growth?

Response: Linear growth is growth that happens at the same rate of change. Every increase in x would bring about the same increase in y. It is constant. With exponential growth, there is a constant multiplier, so the growth rate is changing.