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

    The risk premium is the excess return above the risk-free rate that investors require as compensation for the higher uncertainty associated with risky assets. The five main risks that comprise the risk premium are business risk, financial risk, liquidity risk, exchange-rate risk and country-specific ...
  2. What will happen to my U.S.-based stock portfolio if the U.S. dollar substantially ...

    The effect of a significant depreciation in the value of the U.S. dollar on the value of an investor's U.S-based portfolio is very much a function of the portfolio's contents. In other words, if the dollar declines substantially in value against a number of other currencies, your portfolio might be worth ...
  3. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to ...

    Once you've identified a security that you want to purchase, you need to determine a price at which you want to sell if the price heads in an adverse direction and a price at which you want to take profits when the price moves in your favor. In many cases, this data is relayed to the broker using three ...
  4. Does issuing preferred shares offer a tax advantage for corporations?

    There is no direct tax advantage to the issuing of preferred shares when compared to other forms of financing such as common shares or debt. The reason for this is that preferred shares, which are a form of equity, are paid fixed dividends with after-tax dollars.
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  6. Tax Relief For Katrina Victims

    Find out if you qualify for the assistance offered to hurricane survivors by the U.S. government.
  7. Where can I find information about pre- and after-hours trading on the NYSE and the ...

    The stock market, particularly the NYSE and Nasdaq, is traditionally open between 9:30am and 4pm EST. Over time, with the adoption of new technology and increases in demand for trading, these hours have been extended to include what is known as pre- and after-hours trading.
  8. I have some stocks in a taxable account. Can I use them to fund my Roth IRA instead ...

    Regular IRA contributions must be made in cash. Contributions of securities are not allowed. Internal Revenue Code Section § 219(e)(1) and IRS Publication 590 provide detailed information about IRA contribution rules.Exceptions apply to rollover contributions if the same security was distributed.For ...
  9. Can a bond have a negative yield?

    The return a bond provides to an investor is measured by its yield, which is quoted as a percentage. Current yield is a commonly quoted yield calculation, used to evaluate the return on a bond for a one-year period. It only accounts for the interest, or coupon payments, that the bond returns to investors.
  10. How do I calculate the adjusted closing price for a stock?

    When trading is done for the day on a recognized exchange, all stocks are priced at close. The price that is quoted at the end of the trading day is the price of the last lot of stock that was traded for the day. This is called a stock's closing price.
  11. What happens if a company doesn't think it will collect on some of its receivables?

    The accounts receivable account, or receivables for short, is created when a company extends credit to a customer based on a sale. However, there are times when a company will not collect on a particular sale, and the company must account for this on its financial statements.
  12. Why do some stock quotes appear in bold print in the newspaper?

    When it comes to keeping track of a stock's movements, many investors still look up the latest data in the local newspaper. Some of the most important data found in these stock tables includes a company's name, ticker symbol, weekly highs and lows, volume, previous high, low, close and the net change ...
  13. Given a good bookkeeping system, would financial accounting be necessary?

    Bookkeeping and financial accounting may seem like they are new creations, but variations have been around for millennia. The first record keeping systems, according to some, originated in about 4500 B.C. These early forms of record keeping were simple, single entry entities as it related to the company ...
  14. How do I buy an over-the-counter stock?

    The process of purchasing over-the-counter (OTC) stocks is different than purchasing stock from companies on the NYSE and the NASDAQ. The major difference is that OTC securities are unlisted, so there is no central exchange for the market. All orders of OTC securities must be made through market makers ...
  15. If I roll my annuity into an IRA and receive after-tax distributions, will this be ...

    Distributions of after-tax amounts (amounts already taxed) will not be taxable when distributed to you. However, you will be required to report the amount on your tax return as a non-taxable distribution. The plan should send you a Form 1099-R, which is used to report distributions from retirement accounts.
  16. Why would a multinational corporation conduct a vertical foreign direct investment?

    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 a store in China is trying to earn more money by exploring the Chinese market.
  17. Can I contribute to my company-sponsored 401(k) after the company's year-end but ...

    Unlike IRAs, where contributions can be made for the previous year up to April 15 of the current year, salary deferral contributions generally apply to they year in which they are actually withheld from the participant's wages/salary. For instance, assume that an employee makes an election to defer part ...
  18. Do I have to continue SEPPs for an inherited IRA?

    You may discontinue the payments. Once the person who is taking the substantially equal periodic payment (SEPP) dies or becomes disabled, the SEPP can be discontinued. For this purpose, disability must satisfy the definition under Internal Revenue Code § 72(m)(7).To learn more, read Rules Regarding ...
  19. I am rolling my 401(k) into an IRA. After a year, can I convert this amount to a ...

    There is no provision in the tax law that would allow anyone to convert taxable funds and treat it as a tax-free transaction, regardless of how long the assets have been rolled to the Traditional IRA. Of course, conversions of nontaxable amounts are not taxable.
  20. Which States do not require a Representative to write the Series 63 exam?

    The Financial Industry Regulatory Authority (FINRA), (formerly the National Association of Securities Dealers), indicates on their SRO/state fee schedule that the following state jurisdictions do not require a licensed professional to complete the Series 63 exam: Colorado District of Columbia ...
  21. How can I use a child tax credit?

    You may be able to reduce the amount of taxes you owe by up to $4,000, by claiming the child tax credit of up to $1,000 for each qualifying child. For the purposes of the child-tax credit, a qualifying child is defined as follows: Your son, daughter, stepchild, foster child, brother, sister, stepbrother, ...
  22. What are the exceptions to the early distribution penalty for a non-qualified Roth ...

    The exceptions are as follows: The distribution is made on or after the date you reach age 59.5 The distribution is made while you are disabled and you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition.
  23. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination as many times as needed, bear in mind that this will be expensive. Fees paid in order to write the exams are non-refundable.
  24. How long will my Series 7 license last after my employment has been terminated at ...

    According to the Financial Industry Regulatory Authority (formerly the National Association of Securities Dealers), you have two years from the termination date indicated on your most recent U-5 form. In order to prevent your license's expiration, you must regain employment at another member firm within ...
  25. Can I give stock as a gift?

    Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. If the stock has appreciated in value, the holder can avoid paying the capital gains tax by giving it as a gift. There are two methods in transferring the ownership of a stock, ...
  26. If I have already completed the Series 6 examination, do I have to complete the entire ...

    After having written the Series 6 examination, there would be significant overlap with the Series 7 in areas such as mutual funds, unit investment trusts, and municipal securities. The Financial Industry Regulatory Authority or FINRA, (formerly the National Association of Securities Dealers (NASD)), ...
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  28. Do I have to successfully complete the Series 7 exam before I can register for the ...

    There are no prerequisites to register for the Series 63 exam. However, once you have registered for the exam, you must schedule your exam within the 120-day window provided by the Financial Industry Regulatory Authority (formerly known as the National Association of Securities Dealers or NASD).
  29. How does a credit crunch occur?

    A credit crunch occurs when there is a lack of funds available in the credit market, making it difficult for borrowers to obtain financing. This happens when lenders have limited funds available to lend (or are unwilling to lend additional funds), or have increased the cost of borrowing to a rate that ...
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  31. Can a creditor seize my retirement savings?

    Whether a creditor can seize your retirement savings will depend on the type of account in which you are holding your retirement savings and the creditor that is seeking repayment.If your creditor is a government organization, such as the IRS, then none of your accounts, not even your 401(k) plan or ...
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  34. What is the candle maker's petition?

    The "Candle Maker's Petition" is a satire of protectionist tariffs written the by great French economist, Frederic Bastiat. In many ways, it expanded on the free market argument against mercantilism set forth by Adam Smith, but Bastiat's target was government tariffs that were levied to protect domestic ...
  35. How do government-issued stimulus checks affect the economy?

    Stimulus checks are payments given to individuals by the government based on taxes paid in the previous year. The hope is that the recipients of these checks will increase spending, thus stimulating the economy.How do stimulus checks work?Stimulus checks are a short-term solution primarily used in a ...
  36. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). You would need to check with your current employer to determine if it will allow the rollover. This way, you will keep the amount in your retirement nest egg and defer paying incomes ...
  37. What is the Ricardian vice?

    The Ricardian vice refers to abstract model-building and mathematical formulas with unrealistic assumptions. In simpler terms, the Ricardian vice is the tendency for economists to make and test theories that aren't troubled by the complexities of reality, resulting in theories that are mathematically ...
  38. Reining In CEO Rewards

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  39. What was "Operation Wooden Nickel"?

    On November 19, 2003, the Commodity Futures Trading Commission (CFTC) and the FBI announced the completion of an 18-month undercover operation that resulted in more than 30 traders and brokers being charged with wire fraud, money laundering, securities fraud and conspiracy.
  40. Who is Mr. Copper?

    A sense of mystery still surrounds Yasuo Hamanaka, a.k.a. Mr. Copper, and the magnitude of his losses. From his perch at the head of Sumitomo's metal trading division, Hamanaka controlled 5% of the world's copper supply. This may sound like a small percentage, given that 95% of the world's copper supply ...
  41. What is a "dog and pony" show?

    A dog and pony show, or a road show, is a term used to describe a seminar or forum that has the purpose of introducing new products or financial securities issues to potential investors or buyers. A dog and pony show is usually hosted by investment banks and firms that have products or securities to ...
  42. What does "after the bell" mean?

    "After the bell" is financial slang for activity occurring after the close of the stock market, including after-hours trading, illegal late trading of open-ended funds (during the mutual fund scandal of 2003), earnings announcements, acquisition plans and merger agreements.
  43. Why Are Mortgage Rates Increasing?

    Learn how the secondary mortgage market and investor demand affect the cost of home ownership.
  44. I work for two companies. How much can I contribute to each company's SIMPLE IRA?

    It depends.If you work for two companies that are unrelated and unaffiliated, you can make salary deferral contributions of up to $20,500 between the two plans with no more than $13,000 going to one of the SIMPLE plans in 2008.For this purpose, unrelated and unaffiliated means that the companies have ...
  45. Mergers Put Money In Shareholders' Pockets

    Learn the five ways mergers and acquisitions can increase a company's value.
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  47. You Can't Live On Love

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