• Showing 1-50 of 58 items
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  1. Investing

    What happens to a company's stocks and bonds when it declares ...

    Filing for chapter 11 bankruptcy protection simply means that a company is on the verge of bankruptcy, but believes that it can once again become successful if it is given an opportunity to reorganize ...
  2. Investing

    A cash buyout agreement has been announced for a stock I ...

    The announcement of an acquisition or a merger does not necessarily mean that the deal will be resolved as originally stated. Speculation of the merger's final result will affect the state of the current ...
  3. Forex

    What is an overnight position in the forex market?

    Overnight positions represent all open long and short positions that a forex trader possesses as of 5:00pm EST, which is consider the end of the forex trading day. The new trading day is considered to ...
  4. Investing

    How do investors lose money when the stock market crashes?

    Over the last hundred years, there have been several large stock market crashes that have plagued the American financial system. For example, during the Great Depression, stock prices dropped to 10% of ...
  5. Investing

    How do university endowments work?

    Endowments represent money or other financial assets that are donated to universities or colleges. The sole intention of the endowment is to invest it, so that the total asset value will yield an inflation-adjusted ...
  6. Investing

    Do underwriters make guarantees to sell an entire IPO issue?

    Underwriters represent the group of representatives from an investment bank whose main responsibility is to complete the necessary procedures to raise investment capital for a company issuing securities. ...
  7. Investing

    What happens when a circuit breaker is put into effect?

    A circuit breaker represents a situation where the Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) have announced a market-wide (includes NYSE, NASDAQ and ...
  8. Investing

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

    Logically speaking, it is unlikely that anyone who has developed or stumbled upon a sure fire method to pick stocks will share their method, because the method will not work if too many people are aware ...
  9. Investing

    What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell a specific type of asset at a specific time at a given price. However, it is in ...
  10. Options & Futures

    How do speculators profit from options?

    As a quick summary, options are financial derivatives that give their holders the right to buy or sell a specific asset by a specific time at a given price (strike price). There are two types of options: ...
  11. Trading Strategies

    Why do futures' prices converge upon spot prices during ...

    It's a fairly safe bet that as the delivery month of a futures contract approaches, the future's price will generally inch toward or even come to equal the spot price as time progresses. This is a very ...
  12. Active Trading Fundamentals

    Mad Money ... Mad Market?

    Jim Cramer's spirited recommendations are a case study in irrational market behavior.
  13. Investing

    What is the purpose of a "repatriated tax break", and why ...

    In 2004, Congress passed the American Jobs Creation Act to create new jobs in an effort to boost the economy. One of the results of the act was the implementation of a repatriated tax break, which gave ...
  14. Options & Futures

    Why do options with the same underlying stock and strike ...

    You would think that two options with the same underlying stock and strike prices would trade at the same price, but interestingly enough, they most often trade at different prices.For example, as of November ...
  15. Investing

    What is a liquidity squeeze?

    A liquidity squeeze occurs when a financial event sparks concerns among financial institutions (such as banks) regarding the short-term availability of money. These concerns may cause banks to be more ...
  16. Investing

    What is Black Friday?

    Black Friday is a popular label attached to the Friday following Thanksgiving Day in the US. This day marks the beginning of the busy shopping season during which most consumers typically start their Christmas/holiday ...
  17. Investing

    What is the history behind the opening and closing bells ...

    Similar to the school bells that most of us heard during our school days, the New York Stock Exchange's (NYSE) opening and closing bells mark the beginning and the end of each trading day. More specifically, ...
  18. Investing

    What is happening during a risk repricing?

    During a strong bull market, the market's overall sense of optimism can often lead to poor estimates about the level of risk that an investment may possess. Unfortunately, once a market correction occurs, ...
  19. Investing

    What are the differences between affiliate, associate and ...

    All three of these terms refer to the degree of ownership that a parent company holds in another company. In most cases, the terms affiliate and associate are used synonymously to describe a company whose ...
  20. Home & Auto

    How does the 80% rule for home insurance work, and how do ...

    The 80% rule refers to the fact that most insurance companies will not fully cover the cost of damage to a house due to the occurrence of an insured event (e.g. fire or flood), unless the homeowner has ...
  21. Investing

    Since stockholders are entitled to a company's assets and ...

    When buying stock in a company, an investor becomes a part owner of that company. In addition to possessing the small degree of voting power that comes with being a stockholder, an investor is entitled ...
  22. Options & Futures

    What is options backdating?

    Options backdating occurs when companies grant options to their executives that correspond to a day where there was a significantly lower share price. It is suspected that these situations are not a coincidence ...
  23. Investing

    What are 'death spiral' convertible bonds?

    Conventional convertible bonds give the bondholder the right to exchange the bond for a certain amount of the issuer's common shares, regardless of the current market price of those shares. The bondholder ...
  24. Options & Futures

    How can unethical executives use options backdating to evade ...

    The practice of options backdating has landed many companies into the hotseat. The SEC constantly investigates possible instances where high level executives have been issued options at a past point in ...
  25. Forex

    Are eurodollars related to the currency called the euro?

    Eurodollars have little to do with the official currency of the European Union, the euro (EUR). In 1999, the euro was implemented as the official currency of the European Union as a means to further integrate ...
  26. Options & Futures

    How do you tell whether an option is American or European ...

    As a quick recap, American-style options are options that can be exercised at the strike price anytime before or on the date of expiration. European-style options, on the other hand, are options that can ...
  27. Investing

    How can I sell private company stock?

    In some instances, both private and public companies may issue shares to their own employees as part of a compensation program. This action is designed to motivate employees by tying a portion of their ...
  28. Investing

    What is political risk and what can a multinational company ...

    For multinational companies, political risk refers to the risk that a host country will make political decisions that will prove to have adverse effects on the multinational's profits and/or goals. Adverse ...
  29. Forex

    How do businesses decide whether to do FDI via green field ...

    When businesses decide to expand their operations to another country, one of the more important dilemmas they can face is whether it is most beneficial to have the business take matters into its own hands ...
  30. Active Trading Fundamentals

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

    For general shorting information such as the short interest ratio, you can usually go to any website that features a stock quotes service. For example, you can find this information on the Yahoo Finance ...
  31. Investing

    On what days are the American stock exchanges closed?

    Similar to most businesses, the major stock markets in North America are open for trading on normal business days only (Monday to Friday, not on holidays). In terms of holidays, both the NYSE and the Nasdaq ...
  32. Investing

    How do segregated funds differ from mutual funds?

    Mutual funds are investment vehicles that many investors have embraced as a simple and relatively inexpensive method for investing in a variety of assets. Segregated funds are similar to mutual funds, ...
  33. Forex

    What are the most common currency pairs traded in the forex ...

    There are many official currencies that are used all over the world, but there only a handful of currencies that are traded actively in the forex market. In currency trading, only the most economically/politically ...
  34. Investing

    How do I open a Swiss bank account, and what makes them ...

    Surprisingly, opening a Swiss bank account is not that much different from opening a standard bank account because you have to fill out forms and provide documentation that proves who you are and what ...
  35. Investing

    Why would a multinational corporation conduct a vertical ...

    In many cases, multinational corporations conduct horizontal foreign direct investment (FDI) activities in order to expand their operations into another market. For example, an American retailer that builds ...
  36. Investing

    What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally expensed based on the time period over which the asset was used. Both ...
  37. Options & Futures

    Can I leave my pension to my spouse when I pass away?

    In most cases, an individual with a pension plan should have the option to leave at least a portion of his or her pension to a surviving spouse and/or child. Oftentimes, this can be done by purchasing ...
  38. Investing

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

    The random walk theory is the occurrence of an event determined by a series of random movements - in other words, events that cannot be predicted. For example, one might consider a drunken person's path ...
  39. Credit & Loans

    Are credit cards and debit cards considered debt instruments?

    Consumer debt instruments allow people to borrow money at specific interest rates. In recent years, the credit industry has become very imaginative in the creation and marketing of consumer debt instruments ...
  40. Investing

    What are the three phases of a completed initial public ...

    While some large and successful companies are still privately-owned, many companies aspire toward becoming a publicly-owned company with the intent to gain another source of raising funds for operations. ...
  41. Forex

    If a country's currency is determined by the strength of ...

    Generally speaking, when Country A's currency is worth more than that of Country B, it does not necessarily mean that Country A's economy is stronger than B's. For example, Japan's economy is regarded ...
  42. Investing

    Is there a difference between ADR and ADS?

    American depositary receipts (ADRs) allow foreign equities to be traded on U.S. stock exchanges; in fact, this is how the stock of most foreign companies trades in U.S. stock markets. ADRs are issued by ...
  43. Investing

    How does a stock split affect cash dividends?

    When a company decides to issue a stock split (or stock dividend), a couple of possibilities could occur concerning what would happen to an upcoming cash dividend. The most important factors are the time ...
  44. Investing

    What are the advantages and disadvantages to dealing with ...

    In recent years, large companies have set up internet-only banks as a means of diversifying into the financial sector and providing personal banking services. For a company, the greatest advantage of providing ...
  45. Active Trading Fundamentals

    What does "squeezing the shorts" mean?

    "Squeezing the shorts" refers to a questionable practice in which a trader takes advantage of a stock that has been short sold substantially by buying up large blocks of the stock. This causes the stock's ...
  46. Investing

    Why do companies issue 100-year bonds?

    Although it is rare, companies do issue bonds that exceed an average person's life expectancy. For example, multi-billion dollar companies such as the Walt Disney Company and Coca-Cola have issued 100-year ...
  47. Investing

    What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying business(es) are somehow involved in operations aimed at improving ...
  48. Investing

    What are the economic implications of government subsidies ...

    In order to make the price of oil more affordable to its citizens, governments sometimes provide subsidies, which can allow the price of oil to remain fixed below free floating market rates. For example, ...
  49. Investing

    Why do some mergers and acqusitions fall through?

    Most merger and acquisition (M&A) activities are carried out successfully, but from time to time, you will hear that a deal fell through as either the acquirer, target, or both parties withdrew from ...
  50. Investing

    Where can I find information on different companies so that ...

    Financial portal websites, such as Yahoo Finance or Google Finance allows the average investor to view content related to a specific stock from a variety of different financial websites. The financial ...
  • Showing 1-50 of 58 items
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