Investing FAQs

  1. What happens to a stop order after a stock splits?

  2. Do speculators have a destabilizing effect on the financial system?

  3. What is a permanent portfolio?

  4. What is an unregistered mutual fund?

  5. What is a growth recession?

  6. What is high-frequency trading?

  7. Is it possible to short sell real estate?

  8. What was the most miserable day for financial markets according to the Misery Index?

  9. Does the balance sheet always balance?

  10. When did mutual funds come to the U.S.A.?

  11. The conduit theory...

  12. What is the difference between investing and speculating?

  13. What is moral hazard?

  14. Under the Investment Company Act of 1940, an investment company must have minimum net assets of how much before it can issue shares to the public?

  15. Under the Investment Company Act of 1940, an investment company, or mutual fund company, must have minimum net assets of how much before it can issue shares to the public?

  16. Which statement(s) is/are FALSE about market risk?

  17. What is the difference between yields and interest rates?

  18. What does churning mean?

  19. What is an absolute rate?

  20. What burst the Mississippi bubble?

  21. Can I still make money with a couch-potato portfolio?

  22. Is there short selling in China?

  23. Which statement is FALSE about a prospectus issued under the Securities Act of 1933?

  24. When and why did the euro make its debut as a currency?

  25. What is the performance cult?

  26. What's the difference between EBITDA, EBITDAR and EBITDARM?

  27. All of the following statements about convertible bonds are FALSE EXCEPT:

  28. An investor is in the 36% tax bracket and holds municipal bonds with an 8% yield-to-maturity. What is the equivalent taxable yield?

  29. Which day is known as China's "Black Tuesday" and why?

  30. Why did the Department of Justice launch an inquiry into the sale of ImClone shares in 2001?

  31. Compute the offering price for a mutual fund with NAV of $1,200,000,000, an 8% front-end load, and 1,000,000 shares outstanding.

  32. What is financial double-dipping?

  33. Why is Frank Quattrone credited with contributing to the growth of the dotcom bubble?

  34. What is the difference between a gilt edged bond and a regular bond?

  35. Where can I find all of the stocks in the Dow Jones Industrial Average?

  36. What is the difference between exchange-traded funds and mutual funds?

  37. What currency is affected by the interest rate decisions of the Bank of England (BoE)?

  38. Which of the following BEST describes the requirements for advertisements of new municipal securities issues?

  39. How did Peter Young gain infamy as a "rogue trader"?

  40. How do companies like Moody's rate bonds?

  41. What is the salad oil scandal?

  42. What is a Chinese hedge?

  43. What is "hot money"?

  44. How do I use a barbell strategy?

  45. How do I use a premium put convertible?

  46. How did derivatives trader Nick Leeson contribute to the fall of Barings Bank?

  47. What is a wild-card play?

  48. How did currency trader John Rusnak hide $691 million in losses before being caught for bank fraud?

  49. Your client has a net short-term gain of $3,000 and a net long-term loss of $8,000. Which of the following statements are true?

  50. Are long-term U.S. government bonds risk-free?

  51. What are the advantages and disadvantages of buying stocks instead of bonds?

  52. If the stock market is so volatile, why would I want to put my money into it?

  53. How does the government influence the securities market?

  54. What is a mutual fund's NAV?

  55. What's the difference between absolute P/E ratio and relative P/E ratio?

  56. How can you lose more money than you invest shorting a stock? If you have no money left in your account, how do you pay it back?

  57. I have only $500 to invest, am I limited to buying only penny stocks?

  58. I live in the U.S. How can I trade stocks in China and India?

  59. Is a Canadian resident allowed to participate in a direct stock purchase plan from a U.S. company such as Pfizer?

  60. How does a stop-loss order work, and what price is used to trigger the order?

  61. Does a stock dividend dilute the price per share as would a forward stock split?

  62. How do you calculate the cost basis for a mutual fund over an extended time period?

  63. Why would a multinational corporation conduct a vertical foreign direct investment?

  64. Why does a crisis in emerging markets cause U.S. Treasury yields to decrease?

  65. Why doesn't the price of a callable bond exceed its call price when interest rates are falling?

  66. What is securitization?

  67. Is there such a thing as a foolproof stock-picking strategy?

  68. How can I buy oil as an investment?

  69. When you buy a stock in a company, does it necessarily mean that one of the shareholders is selling it to you?

  70. Why are P/E ratios generally higher during times of low inflation?

  71. What exactly is a portfolio? Is it something I can carry around?

  72. What is the 'Rule of 72'?

  73. A corporate bond I own has just been called by the issuer. How can a company legally take away my bond? How do these call provisions work?

  74. Why do you need a margin account to short sell stocks?

  75. Which is better a cash dividend or a stock dividend?

  76. What's the difference between net present value and internal rate of return? How are they used?

  77. What is the difference between iShares, VIPERs and Spiders?

  78. How are realized profits different from unrealized or so-called "paper" profits?

  79. I want to try short selling, but how can I sell something that I don't own?

  80. How do businesses decide whether to do FDI via green field investments or acquisitions?

  81. How do I avoid paying excess taxes on securities I have sold?

  82. Can an open-ended fund's price appreciate significantly?

  83. Are mortgage-backed securities backed by any guarantees?

  84. How can I find out if a company I like is included in an index?

  85. What is an echo bubble?

  86. Where can I buy government bonds?

  87. Where can I find the P/E ratios for the Dow and S&P 500?

  88. What is the difference between a global fund and an international fund?

  89. What is arbitrage?

  90. I have discovered that a bond I am interested in has a sinking fund. What does this mean?

  91. What is the ideal number of stocks to have in a portfolio?

  92. What do people mean when they say debt is a relatively cheaper form of finance than equity?

  93. What is a spider and why should I buy one?

  94. What's the difference between short-term investments in marketable securities and equity?

  95. Is there a difference between ADR and ADS?

  96. What are 'death spiral' convertible bonds?

  97. How do segregated funds differ from mutual funds?

  98. Where can I find the number of shares shorted on a specific stock?

  99. I sold my house. Can I exclude the gain from my income?

  100. Can I give stock as a gift?

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