Investing FAQs

  1. What does a high inventory turnover tell investors about a company?

  2. What's the difference between an individual retirement account (IRA) and a certificate of deposit (CD)?

  3. Why is it sometimes better to use an average inventory figure when calculating the inventory turnover ratio?

  4. How do you calculate working capital?

  5. How do changes in working capital affect a company's cash flow?

  6. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

  7. How do you calculate return on equity (ROE)?

  8. Why is the compound annual growth rate (CAGR) misleading when assessing long-term growth rates?

  9. What are the main differences between return on equity (ROE) and return on assets (ROA)?

  10. What are the main differences between compound annual growth rate (CAGR) and internal rate of return (IRR)?

  11. Are companies with a negative return on equity (ROE) always a bad investment?

  12. How do I calculate the inventory turnover ratio?

  13. Why is return on investment (ROI) a bad measure for calculating long-term investments?

  14. What factors go into calculating social return on investment (SROI)?

  15. How do I calculate the P/E ratio of a company?

  16. How can the price-to-earnings (P/E) ratio mislead investors?

  17. How can return on investment (ROI) calculations be manipulated?

  18. Is there value in comparing companies from different sectors by using the debt-to-equity ratio?

  19. What is the formula for calculating earnings per share (EPS)?

  20. What is the formula for calculating the current ratio?

  21. How do interest rates affect the weighted average cost of capital (WACC) calculation?

  22. What is considered a high debt-to-equity ratio and what does it say about the company?

  23. What are the best uses for trailing EPS, current EPS and forward EPS?

  24. How can the current ratio be misinterpreted by investors?

  25. What is the formula for calculating weighted average cost of capital (WACC)?

  26. What is the formula for calculating the debt-to-equity ratio?

  27. What's the difference between weighted average cost of capital (WACC) and internal rate of return (IRR)?

  28. What are the main differences between the current ratio and the quick ratio?

  29. Why is earnings per share (EPS) also known as “The Bottom Line”?

  30. What is a BRIC nation?

  31. What is the Dodd-Frank Act? How does it affect me?

  32. I want to invest my emergency fund to earn interest. What is a relatively safe and liquid investment I can easily withdraw from if disaster struck?

  33. What is a triple tax-free municipal bond?

  34. How are capital gains and dividends taxed differently?

  35. How do you flip a home?

  36. How do I start using technical analysis?

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

  38. Is it a good idea to buy mutual funds from banks?

  39. Why do some companies pay a dividend, while other companies do not?

  40. Is it possible to beat the market?

  41. What is a dividend?

  42. Besides a savings account, where is the safest place to keep my money?

  43. How does TARP affect the economy?

  44. How long can you short sell for?

  45. I recently got married and now we (together) have two houses (hers and mine). I have only lived in mine for 13 months and was wondering if there was an exemption to capital gains tax if we could not reasonably afford the two properties?

  46. How can I invest in a foreign exchange market?

  47. What is the difference between investing and trading?

  48. What is the difference between weighted average shares outstanding and basic weighted average shares?

  49. What are austerity measures?

  50. What is the difference between arbitrage and speculation?

  51. What is finance?

  52. How does a company switch from one stock exchange to another?

  53. What is a derivative?

  54. If you have a house that is under your company name and you want to sell it back to yourself, do you have to pay capital gains taxes?

  55. What is the hard-to-borrow list?

  56. What is "whoops" and how did it come to refer to one of the biggest municipal bond defaults in history?

  57. What is the difference between risk tolerance and risk capacity?

  58. What does it mean when there is "price action"?

  59. Where do most fund managers get their market information?

  60. If my mortgage lender goes bankrupt, do I still have to pay my mortgage?

  61. What do the different types of mutual fund classes mean?

  62. Is it possible to trade forex options?

  63. What happens during the spending/gifting phase of an investor's life cycle?

  64. How can I use layaway plans for budgeting?

  65. I want to start buying stocks. Where do I start?

  66. How do I use an arbitrage strategy in forex trading?

  67. How are international exchange rates set?

  68. Do ETFs have a board of directors?

  69. Is it possible to invest in an index?

  70. What is the double taxation of dividends?

  71. I don't understand how a stock has a trading price of 5.97, but when I buy it I have to pay the asking price of 6.04. How can I be paying more than what the stock is trading for?

  72. Why can't I enter two sell orders on the same stock?

  73. How does the money from the interest on my bond get to me?

  74. How do open market operations affect the U.S. money supply?

  75. What percentage of a company's float can be shorted?

  76. According to the CAPM, the expected return on a stock, that is part of a portfolio, will depend on all of the following except:

  77. What is a cross hedge?

  78. The security which offers the best protection against purchasing power risk or inflation is which of the following?

  79. A formula timing plan which consists of periodic purchases of a fixed dollar amount of an investment company regardless of price is known as:

  80. Which investment would be most suitable for a client investing for retirement and seeking protection from purchasing power risk in the future?

  81. Is there a buy-and-hold strategy in forex, or is the only way to make money by trading?

  82. If a client has a very low risk tolerance, all of the following might be suitable investments EXCEPT:

  83. What protects an investor’s interest in the case of terrorist sabotage, or act of war that destroys the electronic record of stock ownership?

  84. How much money do I need to start trading?

  85. The reason why ERISA qualified plans should have an investment policy statement is to:

  86. When and why did brokerages switch from fixed commissions to negotiated ones?

  87. How are bonds rated?

  88. What advantages do exchange-traded funds have over mutual funds?

  89. What are some of the key differences between IFRS and U.S. GAAP?

  90. The real rate of return is the amount of interest earned over and above the?

  91. The BEST definition of a benchmark portfolio is:

  92. Is short selling allowed in India?

  93. Why are most bonds traded on the secondary market "over the counter"?

  94. Why is debt issued in both temporary and permanent forms?

  95. What are the advantages and disadvantages of mutual funds?

  96. What is the difference between an options contract and a futures contract?

  97. What is the difference between a Ponzi and a pyramid scheme?

  98. Where do I look for fees that I am charged on investments? What are those fees called?

  99. What is a "wash sale"?

  100. When diversifying a bond portfolio, you should make sure to take into account all of the following EXCEPT:

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