Investing FAQs

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

  2. Why did dotcom companies crash so drastically?

  3. What is earnings management?

  4. Why do some closed-end mutual funds trade above or below their net asset values?

  5. Where can I find historical stock/index quotes?

  6. I will be receiving monies from a QDRO executed pursuant to my divorce. I would like to take a portion of the money as a distribution to pay for a new home. What are the tax implications of doing this?

  7. What is a treasury stock?

  8. What is arbitrage?

  9. What does it mean to use technical divergence in trading?

  10. What is an efficient market and how does it affect individual investors?

  11. What are the minimum margin requirements for a short sale account?

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

  13. What technical tools can I use to measure momentum?

  14. What is the difference between a logarithmic price scale and a linear one?

  15. Why do low interest rates cause investors to shy away from the bond market?

  16. When does one sell a put option, and when does one sell a call option?

  17. What does it mean when a bond has a put option?

  18. Do all international markets trade between 9:30am and 4pm local time?

  19. If an employee is paid by commission, who is responsible for withholding taxes?

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

  21. How do you determine a company's percentage of credit sales?

  22. What is the best method of analysis for forex trading?

  23. Can I match a fund to my religion?

  24. How do I use a "basket" option?

  25. What is market capitulation?

  26. What's the smallest number of shares I can buy?

  27. What is a stock split? Why do stocks split?

  28. What's the smallest number of shares of stock that I can buy?

  29. Why do option volume quotes differ on different websites?

  30. What is a pure play?

  31. 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?

  32. Can a stock have a negative price-to-earnings (P/E) ratio?

  33. When short selling a stock, how long does a short seller have before covering?

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

  35. Do convertible bonds have voting rights?

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

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

  38. Is there a difference between ADR and ADS?

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

  40. What is the best time of the day to trade?

  41. Can a church issue a bond?

  42. Does a company's American depositary share equal one share of common stock?

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

  44. What is fair capital?

  45. What is securitization?

  46. Is scalping a viable forex trading strategy?

  47. What is Black Monday?

  48. 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?

  49. What is the "Nifty 50"?

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

  51. What's the difference between shares and stocks?

  52. I have a short period of time (1 year or less) during which I will have money to invest. What are my investment options?

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

  54. If the price of the bond falls, does that mean the company won't pay me the par value?

  55. What are pro forma earnings?

  56. What's the difference between a straddle and a strangle?

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

  58. In the forex market, how is the closing price of a currency pair determined?

  59. What is a basis point (BPS)?

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

  61. Is it true that you can sell your home and not pay capital gains tax?

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

  63. How can I invest in gold?

  64. What is the difference between leverage and margin?

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

  66. Who sets the price of commodities?

  67. How is the Parabolic SAR used in trading?

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

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

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

  71. What are managed futures?

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

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

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

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

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

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

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

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

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

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

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

  83. 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

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

  85. 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?

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

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

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

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

  90. What does "squeezing the shorts" mean?

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

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

  93. Can I give stock as a gift?

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

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

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

  97. What does investment grade mean?

  98. Why would a stock have no par value?

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

  100. What are soft dollars?

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