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Investing FAQs

  1. Are ETFs required to pay out a percentage of income as dividends?

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

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

  4. How are foreign exchange rates affected by commodity price fluctuations?

  5. Can a bond be traded over-the-counter?

  6. How does a depository bank benefit from issuing an ADR for a foreign company for free?

  7. How does a person gain from an investment?

  8. Why do some preferred stocks have a higher yield than common stocks?

  9. What constitutes an "intention to call a debt instrument before maturity" for tax purposes?

  10. How should I estimate my income from fixed sources like bonds, CDs and stocks?

  11. What causes a recession?

  12. Why did dotcom companies crash so drastically?

  13. Why should investors pick less risky investments as they approach retirement?

  14. What does it mean when a bond is selling at a premium? Is it a good investment?

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

  16. Please explain what a short seller is on the hook for when he or she shorts a stock (i.e. dividends, rights offerings, etc.).

  17. What is a "socially responsible" mutual fund?

  18. What happens to the voting rights on shares when the shares are used in a short sale transaction?

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

  20. What is a convertible bond?

  21. If I sell my shares before the ex-dividend date will I still get the dividend?

  22. Can a bond have a negative yield?

  23. Where do companies keep their cash?

  24. Are eurodollars related to the currency called the euro?

  25. Why do longer term CDs pay a higher rate than the short-term CDs?

  26. Is there a limit to how many stocks and/or bonds an interested investor can buy?

  27. How can I budget for both short-term expenses and long-term goals?

  28. Are all bank accounts insured by the FDIC?

  29. I have several CDs in my IRA with different maturities. Can I roll them over to another institution with a better rate as they mature?

  30. What does "in street name" mean, and why are securities held this way?

  31. What is the incentive to buy a stock without dividends?

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

  33. What are soft dollars?

  34. What is the difference between yield and return?

  35. Can a stop-loss order be used to protect a short sale transaction?

  36. What does the law say about non-U.S. citizens buying stocks of U.S. companies? Are there any restrictions?

  37. How is the value of the S&P 500 calculated?

  38. Where does the stock come from when convertible bonds are converted to stock?

  39. Why are big foreign companies considering delisting their American depositary receipts?

  40. Are ETFs subject to the short sale uptick rule?

  41. What does CHIPS UID mean?

  42. I would like to invest in a dividend-paying stock. How can I find out which stocks pay dividends?

  43. When my mutual fund declares an income distribution, the fund price falls by a similar amount. How does this distribution benefit me?

  44. I have a KSOP through my employer that I've invested 100% in company stock. I am now concerned that I'm not diversified and would like to move out of company stock and into mutual funds. Is this allowed with the funds I've contributed to the account?

  45. How does pyramiding work?

  46. What does investment grade mean?

  47. What is accrued interest, and why do I have to pay it when I buy a bond?

  48. What is the difference between a blend fund and a balanced fund?

  49. What is a DRIP?

  50. How do stock splits affect short sellers?

  51. Stocks with high P/E ratios can be overpriced. Is a stock with a lower P/E always a better investment than a stock with a higher one?

  52. Do convertible bonds have voting rights?

  53. How many types of markets can an investor choose from?

  54. Do noise traders have any long-term effect on stock prices?

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

  56. Are mutual fund performance numbers reported net of fees (operating expenses and 12b-1)?

  57. At what point in the ordering process does a broker charge commission?

  58. What are the oldest mutual funds, by date of inception?

  59. Can I match a fund to my religion?

  60. How can I buy oil as an investment?

  61. What is the difference between preferred stock and common stock?

  62. What is a stripped bond?

  63. What does "buy and hold" mean?

  64. Why can you short sell an ETF but not an index fund?

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

  66. 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?

  67. What is the difference between convertible and reverse convertible bonds?

  68. What does 'froth' mean in terms of the real estate market?

  69. If different bond markets use different day-count conventions, how do I know which one is used in any particular market?

  70. What is the difference between municipal bonds and standard money market funds?

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

  72. Can I sell mutual fund shares below their minimum intial purchase amount without being penalized?

  73. How is margin interest calculated?

  74. What is Black Monday?

  75. What is an echo bubble?

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

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

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

  79. 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?

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

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

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

  83. 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?

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

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

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

  87. What careers are popular among CFA charterholders?

  88. What is a trailing commission?

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

  90. Can private corporations issue convertible bonds?

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

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

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

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

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

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

  97. What is a basis point (BPS)?

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

  99. Where can I get bond market quotes?

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

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