The feeling of satisfaction and joy that a tax refund creates in a person. This feeling is somewhat misguided because the tax is only refunded because the person paid too much tax during the previous year. While it may be more emotionally uplifting to receive a tax refund after tax season compared to having less tax removed from each paycheck, a tax refund, logically, is less desirable than owing tax. This means that you have given the government an interest-free loan; you paid out a little bit extra from each paycheck to the government and at the end of the next tax season, you receive the same amount back.
An order used by currency traders specifying the exact rate or number of pips from the current price point where to close out their current position for a profit. The rate deemed to be the level where the trader wants to take a profit is sometimes referred to as the "take-profit point". |||As the name suggests, take-profit orders are used to lock in profits in the event the rate moves in a favorable direction. For example, if you are long a currency pair position and believe the price will rise to a certain level, but are unsure what it will do beyond that level, placing a take-profit order at that point will automatically close out your position allowing you to lock in profit. Example: Buy $100 worth of yen at 107.4 yen per dollar = 100*107.40 = 10,740 yen Place a take-profit order at 108.80. Price then rises from 107.40 to 108.80 Take-profit order automatically executed to sell $100 and buy 10,880 yen Profit of 140 yen realized.
The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today. There are two ways to calculate FV: 1) For an asset with simple annual interest: = Original Investment x (1+(interest rate*number of years)) 2) For an asset with interest compounded annually: = Original Investment x ((1+interest rate)^number of years) |||Consider the following examples: 1) $1000 invested for 5 years with simple annual interest of 10% would have a future value of $1,500.00. 2) $1000 invested for 5 years at 10%, compounded annually has a future value of $1,610.51.
A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details about an investment offering for sale to the public. A prospectus should contain the facts that an investor needs to make an informed investment decision.Also known as an "offer document". There are two types of prospectuses for stocks and bonds: preliminary and final. The preliminary prospectus is the first offering document provided by a securities issuer and includes most of the details of the business and transaction in question. Some lettering on the front cover is printed in red, which results in the use of the nickname "red herring" for this document. The final prospectus is printed after the deal has been made effective and can be offered for sale, and supersedes the preliminary prospectus. It contains finalized background information including such details as the exact number of shares/certificates issued and the precise offering price.In the case of mutual funds, which, apart from their initial share offering, continuously offer shares for sale to the public, the prospectus used is a final prospectus. A fund prospectus contains details on its objectives, investment strategies, risks, performance, distribution policy, fees and expenses, and fund management.
An infamous phrase uttered by Alan Greenspan in 1996 to describe the overvalued market at the time. Although every word spoken by Mr.Greenspan, former chairman of the Federal Reserve Board, is scrutinized, this phrase was even more so examined as market analysts tried to uncover any and all possible results. The phrase even became the title of a New York Times best-selling book by Robert Schiller. On February 1, 2006, Ben Bernanke replaced Alan Greenspan as the Federal Reserve Board chairman.
A derivative instrument with underlying assets based on equity securities. An equity derivative's value will fluctuate with changes in its underlying asset's equity, which is usually measured by share price. Investors can use equity derivatives to hedge the risk associated with taking a position in stock by setting limits to the losses incurred by either a short or long position in a company's shares. The investor receives this insurance by paying the cost of the derivative contract, which is referred to as a premium. If an investor purchases a stock, he or she can protect against a loss in share value by purchasing a put option. On the other hand, if the investor has shorted shares, he or she can hedge against a gain in share price by purchasing a call option.Options are the most common equity derivatives because they directly grant the holder the right to buy or sell equity at a predetermined value. More complex equity derivatives include equity index swaps, convertible bonds or stock index futures.
Movable furniture, fixtures or other equipment that are have no permanent connection to the structure of a building or utilities. These items depreciate substantially but definitely are important costs to consider when valuing a company, especially in liquidation. |||Examples of FF&E include desks, chairs, computers, electronic equipment, tables, bookcases and partitions.
Analyzing an underlying decision or decision-making process in the context of resources spent and potential gain. The investment view will examine the project or business, taking into account the factors which make an investment attractive. Some investors may look for "value," which they determine by looking at a company’s price-earnings (PE) ratio compared to the industry norm, while others may seek a solid, dividend-yielding stock like General Electric. Of course, as one ages or experiences other material changes in their life, their investment view often changes. Business decisions could have many different reasons for going ahead, this could include building a brand or reducing potential entrants to the industry, but when an investment view is taken, there will be a more structured look at the cost-return relationship given the time. Having a solid, well-defined investment view can help investors maximize profits by focusing their efforts on investments that they know and understand. At its core, a strong investment view will encompass general things, such as profit potential and risk tolerance, as well as more specific items like preferred industries and/or economic sectors.