Investopedia

Continue to Site »

More FAQs »

Investing FAQs

  1. What is the difference between investing and speculating?

  2. What is moral hazard?

  3. 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?

  4. 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?

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

  6. What does churning mean?

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

  8. What is an absolute rate?

  9. What burst the Mississippi bubble?

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

  11. Is there short selling in China?

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

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

  14. What is the performance cult?

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

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

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

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

  19. 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.

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

  21. What is financial double-dipping?

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

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

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

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

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

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

  28. What is a Chinese hedge?

  29. What is "hot money"?

  30. How do I use a barbell strategy?

  31. How do I use a premium put convertible?

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

  33. What is a wild-card play?

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

  35. What's the difference between a load and no-load mutual fund?

  36. What happens if I maintain a short position in a stock that is delisted and declares bankruptcy?

  37. What's the difference between a stop and a limit order?

  38. 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?

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

  40. Short selling vs. purchasing a put option: how do the payoffs differ?

  41. What are the components of the risk premium for investments?

  42. I am a non-U.S. citizen living outside the U.S. and trading stocks through a U.S. internet broker. Do I have to pay taxes on the money I earn?

  43. How does the required rate of return affect the price of a stock, in terms of the Gordon growth model?

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

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

  46. What careers are popular among CFA charterholders?

  47. What is a trailing commission?

  48. What is hedging as it relates to forex trading?

  49. Can private corporations issue convertible bonds?

  50. What's the difference between a mutual fund and a hedge fund?

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

  52. How do you find out the price of a mutual fund?

  53. Can a stock lose all its value? How would this affect a long or short position?

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

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

  56. What is a basis point (BPS)?

  57. I want to invest in equities, but I don't have much money. Is there a minimum number of shares I must buy?

  58. Where can I get bond market quotes?

  59. Why are options very active when they are at the money?

  60. How do segregated funds differ from mutual funds?

  61. Why do companies issue 100-year bonds?

  62. Can you place a stop-loss order on a mutual fund?

  63. What is a liquidity squeeze?

  64. When is a dividend payment recognized in the shareholders equity portion of the balance sheet?

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

  66. What is mutual fund timing, and why is it so bad?

  67. Why do interest rates tend to have an inverse relationship with bond prices?

  68. Do hedge funds and mutual funds invest in commodities in high inflation environments?

  69. Does the party loaning shares in a short sale transaction benefit in any way other than from the interest earned on the loan?

  70. My certificate of deposit (CD) has just matured and I plan to contribute $10,000 of it to my current Roth IRA account. The person doing my taxes can't tell me why I can't make such a large contribution except for my low income - I am a disabled veteran on

  71. Which is a better measure for capital budgeting, IRR or NPV?

  72. What parties are involved in the creation of an American depositary receipt?

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

  74. How are futures used to hedge a position?

  75. What is a GTEM order?

  76. How do I find mutual funds that track indexes?

  77. What is the difference between a collateralized mortgage obligation (CMO) and a collateralized bond obligation (CBO)?

  78. Who is Mr. Copper?

  79. Can a company declare a dividend that exceeds its earnings per share?

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

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

  82. Why are the bid prices of T-bills higher than the ask prices? Aren't bids supposed to be lower than ask prices?

  83. What is a mutual fund's NAV?

  84. Which option is better on a mutual fund: a growth option or a dividend reinvestment option?

  85. If I short sell $5,000 worth of stock and the stock becomes worthless, I have made $5,000 with a very small investment. Isn't the return here much greater than 100%?

  86. Do long-term bonds have a greater interest rate risk than short-term bonds?

  87. Why do commercial bills have higher yields than T-bills?

  88. What are the disadvantages of using net present value as an investment criterion?

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

  90. What effect does a company's dividend reinvestment plan have on its stock price?

  91. What is a virtual trailing stop order (VTSO)?

  92. What are managed futures?

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

  94. What's the difference between absolute and relative return?

  95. What is late-day trading? Why is it any different from buying and selling stocks in the after-hours market?

  96. What is arbitrage?

  97. How do I take qualitative factors into consideration when using fundamental analysis?

  98. What is the difference between a company's book value per share and its intrinsic value per share?

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

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

Marketplace
Last Questions Asked:
  1.

    What is a triple tax-free municipal bond?

  2. How do you flip a home?

  3. What is the difference between positive and normative economics?

Trading Center