Stocks FAQs

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

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

  3. How do you calculate working capital?

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

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

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

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

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

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

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

  11. How do I calculate the inventory turnover ratio?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  28. How do I start using technical analysis?

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

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

  31. What is a cross hedge?

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

  33. What is the McGinley Dynamic?

  34. Do stocks that trade with a large daily volume generally have less volatility?

  35. Why is the 1982 AT&T breakup considered one of the most successful spinoffs in history?

  36. Which two companies underwent the biggest corporate merger of the 1990s?

  37. When holding an option through expiration date, are you automatically paid any profits, or do you have to sell the option and pay commissions?

  38. How do I value the shares that I own in a private company?

  39. How do I use the Nova/Ursa ratio?

  40. How do I employ a cash-and-carry trade?

  41. What is the significance of a Schedule 13D?

  42. What is high-frequency trading?

  43. Does the balance sheet always balance?

  44. What is the difference between an acquisition and a takeover?

  45. What does it mean when "N/A" appears for a company's P/E ratio?

  46. What was the first company with a $1 billion market cap?

  47. What is the Coppock curve?

  48. Why would a company do a reverse merger instead of an IPO?

  49. What is the difference between return on equity and return on capital?

  50. What are the penalties for withdrawing from my Traditional IRA less than a year after acquisition?

  51. How do I use a premium put convertible?

  52. What business processes were used to establish the Chevrolet motor company?

  53. 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?

  54. What is the difference between economic value added and market value added?

  55. Why would my stock's value decline despite good news being released?

  56. If a company undergoes an acquisition can an employee withdraw 401(k) funds tax free?

  57. What are managed futures?

  58. What's the difference between "top-down" and "bottom-up" investing?

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

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

  61. 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?

  62. What is the difference between leverage and margin?

  63. What is a GTEM order?

  64. What is the "random walk theory" and what does it mean for investors?

  65. How does pyramiding work?

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

  67. How can I hedge against rising diesel prices?

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

  69. In M&A how does an all-stock or all-cash deal affect the equity of the buying company?

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

  71. A cash buyout agreement has been announced for a stock I own, but why isn't my stock trading at a per-share price equal to the buyout price?

  72. What is a Bermuda swaption?

  73. What number of shares determines adequate liquidity for a stock?

  74. What is the difference between options and futures?

  75. I placed a limit order to buy a stock after the market closed, but the stock's price gapped above the entry price and my order never got filled. How can I prevent this from happening?

  76. What is the haircut rate imposed by clearing corporations?

  77. Why do some stock quotes appear in bold print in the newspaper?

  78. Does a strong trend (ADX > = 40) cause an increase in volatility?

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

  80. How does a pump and dump scam work?

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

  82. How long does a stock that has done a reverse split keep the letter "D" at the end of its symbol?

  83. Can an option have a negative strike price?

  84. How is the Parabolic SAR used in trading?

  85. How long does it take for a merger to go through?

  86. How are the interest charges calculated on my margin account?

  87. What's the difference between old- and new-economy stocks?

  88. What is a staggered board?

  89. How is spread calculated when trading in the forex market?

  90. How can I determine a stock's next resistance level or target price?

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

  92. What is a typical day in the life of someone in M&A? How long does a project last?

  93. What is a back door listing?

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

  95. Is technical analysis used only to analyze stocks?

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

  97. Do stop or limit orders protect you against gaps in a stock's price?

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

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

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

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