1. What are the differences between chapter 7 and chapter 11 bankruptcy?

    Chapter 7 bankruptcy is sometimes also called liquidation bankruptcy. Firms experiencing this form of bankruptcy are past the stage of reorganization and must sell off any un-exempt assets to pay creditors. In chapter 7, the creditors collect their debts according to how they loaned out the money to ...
  2. As a temporary resident of the US, can I withdraw funds from my Traditional IRA without ...

    Should you decide to invest in a Traditional IRA and receive a tax deduction for your contribution, the amounts that you later withdraw will be subject to income tax and an additional 10% early-withdrawal penalty. The penalty will be waived if you meet an exception.Given that you ...
  3. I do not want to totally get out of my retirement 401(k), but I want to take 72(t) ...

    The exact amount of the 72(t) distributions that you are eligible to take will be determined by your age and the IRS published interest rate for the month the calculation is done. Generally, a plan participant who is separated from service (no longer employed by the employer that sponsored the plan in ...
  4. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist and the Nasdaq market maker try to increase the liquidity on their respective exchanges and provide more fluid and efficient trading.
  5. I'm about to retire. If I pay off my mortgage with after-tax money I have saved, ...

    Only you and your financial advisor, family, accountant, etc. can answer the "should I?" question because there are many more factors that aren't in the assumptions you included, and a lot of them relate to your own gut feel. It would be easy if paying off a mortgage were ONLY just another investment.
  6. How are a company's financial statements connected?

    When you do research on different companies by looking at their annual reports, you will typically come across two separate financial statements: the balance sheet and the income statement (also known as the statement of profit and loss). These two statements are very significant for companies as they ...
  7. What is a penny stock?

    The term penny stock has evolved with the market. In the past, penny stocks were stocks that traded for less than a dollar per share. The SEC, however, modified the definition to include all shares trading below $5.If some of these stocks now trade above $1, why are they still called penny stocks? Well, ...
  8. What happens if I maintain a short position in a stock that is delisted and declares ...

    The short seller owes nada. Nil. Zip. Zero.When you short sell you borrow the shares, sell them on the market, and then collect the proceeds as cash. If you wanted to get out of the position, you would have to buy back the same number of shares to repay the person (or brokerage) from whom you borrowed ...
  9. What does it mean when people say they "beat the market"? How do they know they have ...

    "Beating the market" is a difficult phrase to analyze. It can be used to refer to two different situations:1. An investor, portfolio manager, fund or other investment specialist produces a better return than the market average. The market average can be calculated in many ways, but usually a benchmark ...
  10. Why do option volume quotes differ on different websites?

    Option quotes are different in price and in volume because identical options can trade on more than one market or exchange. Typically, the main options exchanges in the U.S. are the American, Pacific, Chicago and Philadelphia exchanges. If you were looking at a particular call option with a specific ...
  11. Why can you short sell an ETF but not an index fund?

    To answer this question, we should first define exactly what an index fund is. An index fund is a mutual fund, or a basket of stocks sold by a mutual fund company, that attempts to mimic or trace the movements of a given index. You can buy index funds for numerous different indices, including the S&P ...
  12. If a stock is delisted, do shareholders still own the stock?

    If a company has been delisted, it is no longer trading on a major exchange, but the owners of the company shares are not stripped of their status as owners. However, delisting often results in a significant or total devaluing of a company's share value.
  13. What is after-hours trading? Am I able to trade at this time?

    After-hours trading (AHT) refers to the buying and selling of securities on major exchanges outside of specified regular trading hours. Both the New York Stock Exchange and the Nasdaq National Market operate from 9:30 a.m. to 4:00 p.m. EST. At one time limited to institutional investors and individual ...
  14. Gauging The Strength Of A Market Move

    Learn how to apply the ACD technique to a longer time horizon.
  15. What is a "socially responsible" mutual fund?

    As the name suggests, socially responsible mutual funds invest exclusively in socially responsible investments. Securities from companies that adhere to social, moral, religious and/or environmental beliefs are a few examples.In addition to basic quantitative analysis, a socially responsible portfolio ...
  16. When should I take my Canadian Pension Plan distributions?

    The Canadian Pension Plan (CPP) is a retirement program from which contributing Canadians may receive payments at the age of 60 or upon a disability. The program, however, does not start immediately paying you upon retirement, disability or at the age of 60 because you must apply for payments.
  17. What are the generally accepted accounting principles for inventory reserves?

    As with most matters related to generally accepted accounting principles (GAAP), accountants assigned with the task of applying GAAP to inventory reserves often use a significant amount of personal judgment. Unfortunately, the judgments made are usually only as accurate as the accountants are honest.
  18. What is the ideal number of stocks to have in a portfolio?

    First off, there is no single correct answer to this question - it will depend on a number of factors such as your country of residence and investment, your investment time horizon and your propensity for reading market news and keeping up-to-date on your holdings.Investors diversify their capital into ...
  19. What is the weighted average of outstanding shares? How is it calculated?

    The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring existing shares, and other financial instruments such as employee options being converted into shares. The weighted average of outstanding shares is a calculation that incorporates ...
  20. I made involuntary contributions to a retirement plan while temporarily employed. ...

    Your options depend on the type of penalty that would apply. If the penalty is a surrender charge or another penalty that would apply to an annuity or insurance product, you may want to consider leaving the assets in the plan until the time when the penalty will no longer apply.
  21. Skipping-Out on Probate Costs

    Don't let bad estate planning lead to unnecessary costs and stress for your inheritors.
  22. What does it mean when financial news reports say that more issues were sold than ...

    This simply means that in a market, more stocks (issues) traded down for the day compared to the number of companies that traded up for the day.When a stock or issue is considered to be bought it must be trading up for the day or higher than it started the day; the idea being that more people want to ...
  23. My mother inherited my father's IRA. When she died, I received an account application ...

    If your brother cannot be found, you may want to check with the IRA custodian and/or the financial advisor to find out if the IRA plan document includes any provisions for such a situation. For instance, some IRA documents state that if a beneficiary cannot be found, that beneficiary will be treated ...
  24. Can an employer adopt a different type of retirement plan for each employee?

    Generally, any qualified retirement plan or IRA-based plan adopted by an employer must cover all eligible employees. Failure to do so could result in plan disqualification. For example, suppose that a partnership company wishes to incorporate an IRA for its partners and a 401(k) plan for the employees.
  25. What is the five-year waiting rule for Roth IRAs?

    There are two five-year waiting periods that apply to Roth IRAs. However, in both cases, the waiting period for a Roth IRA begins on the first day of the applicable calendar year. How this rule applies to you depends on the circumstances. To clarify, let's look at the rule in detail: For the five-year ...
  26. What is the difference between a simple moving average and an exponential moving ...

    The only difference between these two types of moving average is the sensitivity each one shows to changes in the data used in its calculation. More specifically, the exponential moving average (EMA) gives a higher weighting to recent prices than the simple moving average (SMA) does, while the SMA assigns ...
  27. What is the difference between IAS and GAAP?

    To answer this question, we must first define what IAS and GAAP are, in order to get a better grasp of the function they serve in the world of accounting.The acronym "IAS" stands for International Accounting Standards. This is a set of accounting standards set by the International Accounting Standards ...
  28. What is the short/current long-term debt account on a company's balance sheet?

    A lot of confusion can arise with this balance sheet account. After all, how can something be both long and short? Despite appearances, however, this concept is not as complex as one might first think. The short/current long-term debt account on the balance sheet simply shows the portion of long-term ...
  29. How is spread calculated when trading in the forex market?

    First, remember that in the forex markets investors trade one currency for another. Therefore, currencies are quoted in terms of their price in another currency. In order to express this information easily, currencies are always quoted in pairs (e.g. USD/CAD).
  30. Why won't my broker allow me to sell one stock and buy another on the same day?

    There are two likely reasons why a customer would be unable to buy and sell a stock in the same trading day. For simplicity's sake, let's assume that you are trying to sell a stock that you own and buy a different stock that you wish to own, and that the account in which the securities are held is an ...
  31. 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 depreciation and amortization (as well as depletion) are methods that are used to prorate the cost ...
  32. ARMed And Dangerous

    In a climate of rising interest rates, having an adjustable-rate mortgage can be risky.
  33. I withdrew funds from my Roth IRA to contribute elsewhere. How will I be taxed?

    If you close the Roth IRA now and withdraw the balance, you will be taxed on the earnings unless the distribution is qualified. Furthermore, you will pay a 10% early distribution excise tax on the earnings unless you qualify for an exception. The exceptions are listed on page 58 of IRS Publication 59 ...
  34. Trading Psychology: Consensus Indicators - Part 2

    Professional market players are some of the best models for the individual small trader to mimic.
  35. Why are big foreign companies considering delisting their American depositary receipts?

    American depositary receipts (ADRs) were developed to give investors an easier way to invest in foreign companies. An ADR is a financial product issued by U.S. depositary banks and traded on U.S.stock exchanges such as the NYSE and the Nasdaq. Since each ADR represents one or more shares of a foreign ...
  36. In M&A how does an all-stock or all-cash deal affect the equity of the buying company? ...

    Mergers and acquisitions (M&A) are forms of corporate restructuring that are becoming increasingly popular in the modern business environment. The motive for wanting to merge with or acquire another company comes from management trying to achieve better synergy within the organization.
  37. What are the determinants of a stock's bid-ask spread?

    Stock exchanges are set up to assist brokers and other specialists in coordinating bid and ask prices. The bid price is the amount that a buyer is willing to pay for a particular security; the ask price is the amount that a seller wants for that security - it is always a little higher than the bid price.
  38. Can I trade a currency when its main market is closed?

    In the forex market, currencies from all over the world can be traded at all times of the day. The forex market is very liquid, and the increased availability of advanced technology and information processing has only increased the number of participants.
  39. How are futures used to hedge a position?

    Futures contracts are one of the most common derivatives used to hedge risk. A futures contract is as an arrangement between two parties to buy or sell an asset at a particular time in the future for a particular price. The main reason that companies or corporations use future contracts is to offset ...
  40. Can a church issue a bond?

    The North American Securities Administrators Association (NASAA) has acknowledged that "church bonds" are allowed to be issued under certain guidelines. These bonds can be issued only by religious affiliates that are identified as being a "church", "parish", "mosque" or a "synagogue", and can only be ...
  41. When looking at my online broker account, I see an account value, cash value and ...

    When looking at some online brokerage accounts, there are a few figures that may be confusing, including account value, cash value and purchasing power.The first figure, account value or total equity, is the total dollar value you have in your trading account.
  42. How many attempts at the Series 7 exam are permitted?

    The National Association of Securities Dealers (NASD) has not placed any limits on the number of times you can attempt to pass the Series 7 exam. However, there are restrictions on the amount of time that must pass between exam attempts. For your first three attempts you must wait 30 days after each ...
  43. How is the Parabolic SAR used in trading?

    The parabolic SAR is a popular indicator that is mainly used by traders to determine the future short-term momentum of a given asset. The indicator was developed by the famous technician known as Welles Wilder and can also easily be applied to a trading strategy, enabling a trader to determine where ...
  44. What is the difference between arithmetic and geometric averages?

    An arithmetic average is the sum of a series of numbers divided by the count of that series of numbers. If you were asked to find the class (arithmetic) average of test scores, you would simply add up all the test scores of the students, and then divide that sum by the number of students.
  45. How do I avoid paying excess taxes on securities I have sold?

    If you dispose of securities during the tax year, the profit or losses from the transaction are either capital gains or losses. If you held the asset for more than one year, the gain/loss is treated as long-term gains/losses. If you held the assets for up to one year, the gain/loss is treated as short-term ...
  46. How can I tell if I'm eligible for an EITC?

    According to the IRS, over 22 million taxpayers received $41.4 billion dollars in earned income tax credit (EITC) for tax year 2005. On the other hand, it was not claimed by approximately 20 to 25% of eligible taxpayers.The EITC goes toward reducing eligible taxpayers federal taxes, or increase the amount ...
  47. Why do longer term CDs pay a higher rate than the short-term CDs?

    To address this question, let's employ the concept of distance. In the city, a short taxi ride from your hotel to a convention center might cost about $5.00. However, when you depart from your hotel for a ride to the airport located outside the city limits, you're more likely to pay more than $30.00.
  48. What is the maximum amount of time that can elapse between CFA examinations?

    According to the CFA Institute, a candidate can take as much time as necessary between examinations. Therefore, if you passed the June 2006 CFA Level I examination, you could take the CFA Level II examination in June 2008, or even June 2010, instead of in June 2007.
  49. Trademarks Of A Takeover Target

    These tips can lead you to little companies with big prospects.
  50. Are any special forms or documents required when transferring an IRA/SEP/SIMPLE to ...

    Most firms require that you complete their account transfer request form, which they use to request the transfer of assets (to your receiving account) on your behalf. Other than this document and the paperwork used to establish the receiving account, there is no legal documentation required.Keep in mind ...
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