Investing FAQs

  1. How is the Parabolic SAR used in trading?

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

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

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

  5. What are managed futures?

  6. How did George Soros "break the Bank of England"?

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

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

  9. Why don't investors buy stock just before the dividend date and sell right afterwards?

  10. I'm new to this. Can I sell or buy stock by myself?

  11. If I have a number of stock shares and that company reports earnings of X amount per share, do I receive those earnings?

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

  13. Where does the money I have invested in a company go when the stock price decreases?

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

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

  16. Why does my broker allow me to enter only day orders for short selling?

  17. 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

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

  19. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to it if it dips below $27, and I want to do all this in one trading order. What type of order should I use?

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

  21. Where do I place my target when the price of a stock breaks out of a technical chart pattern?

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

  23. What do the numbers that follow the bid and ask numbers in stock quotes represent?

  24. What does "squeezing the shorts" mean?

  25. What happens to my call options if the underlying company is bought out?

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

  27. Can I give stock as a gift?

  28. How do central banks inject money into the economy?

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

  30. Which of the following statements regarding the performance of a mutual fund would be permitted under current rules?

  31. What does investment grade mean?

  32. Why would a stock have no par value?

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

  34. What are soft dollars?

  35. If I own stock that drops in price is this a sign that I should buy more?

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

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

  38. What is the cheapest, fastest way to research, buy and trade stock?

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

  40. What is the difference between a simple moving average and an exponential moving average?

  41. What is the short/current long-term debt account on a company's balance sheet?

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

  43. How do investors lose money when the stock market crashes?

  44. What are 'death spiral' convertible bonds?

  45. Where do companies keep their cash?

  46. What is the difference between a zero-coupon bond and a regular bond?

  47. How does a stock split affect cash dividends?

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

  49. Can I donate stock to charity?

  50. How does a credit crunch occur?

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

  52. How does pyramiding work?

  53. Calculate the total return of the municipal bond described below.

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

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

  56. What is a wrap account and what are the advantages of using one?

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

  58. What are unrealized gains and losses?

  59. Is a company allowed to reduce its dividends?

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

  61. How do stock splits affect short sellers?

  62. If one of your stocks splits, doesn't that make it a better investment? If one of your stocks splits 2-1, wouldn't you then have twice as many shares? Wouldn't your share of the company's earnings then be twice as large?

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

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

  65. Would a slow stochastic be effective in day trading?

  66. Is tracking error a significant measure for determining ex-post risk?

  67. Why would a stock that pays a large, consistent dividend have less price volatility in the market than a stock that doesn't pay dividends?

  68. What is property, plant and equipment, and what does it mean?

  69. Why do futures' prices converge upon spot prices during the delivery month?

  70. How does a person gain from an investment?

  71. How can I use market breadth to my advantage?

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

  73. How do I calculate the percentage gain or loss for my portfolio when all of the stocks have different prices?

  74. What are green investments?

  75. What is a Bermuda swaption?

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

  77. Are my investments insured?

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

  79. What is a DRIP?

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

  81. 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?

  82. Why are some shares priced in the hundreds or thousands of dollars, while other just as successful companies have more normal share prices? For example, how can Berkshire Hathaway's be over $80,000/share, when the shares of even larger companies are only

  83. Can investment real estate be purchased within an IRA and, if so, are there any pitfalls?

  84. Should I buy options that are in the money or out of the money?

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

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

  87. What is the difference between hedging and speculation?

  88. What happens if a company doesn't think it will collect on some of its receivables?

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

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

  91. Where do investors tend to put their money in a bear market?

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

  93. Who bears the risk of bad debts in securitization?

  94. Is there a difference between socially responsible investing (SRI) and green investing?

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

  96. What is the difference between fundamental and technical analysis?

  97. How does somebody make money short selling?

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

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

  100. How can I buy an S&P 500 fund?

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