Investment and Finance
The most frequently asked tax questions related to Investment and Finance
Investments & Financial Planning
In relation to the stock market , what does Execution mean ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
"Execution" is the process of completing an order to buy or sell securities. Once a trade is executed, it is reported on a Confirmation Report. The settlement which is the payment and transfer of ownership, occurs in the U.S. between 1 day for mutual funds and 5 days with stocks after an order is executed.
Investments & Financial Planning
In relation to the stock market , what are Money Markets ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
Money markets are for borrowing and lending money for three years or less. The securities in a money market can be either U.S.government bonds, treasury bills or commercial paper from banks and companies. Money market demand accounts are accounts that pay interest based on short-term interest rates. A Money market fund is a mutual fund that invests only in short-term securities, such as commercial paper, bankers acceptances, repurchase agreements and government bills. The net asset value per share is maintained at $1.00. Such funds are not federally insured.
In relation to retirement, what is a Money Purchase plan?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
A Money purchase plan is a defined benefit contribution plan in which the participant contributes some part of his or her salary and the employer contributes at the same or a different rate. It is also called an individual account plan.
Investments & Financial Planning
In relation to the stock market , what is the Annual Report ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
--- Annual report --->
The Annual report is a yearly record of a publicly held company's financial condition. It includes a description of the companys operations, its Balance Sheet and Income Statement. SEC rules require that it be distributed to all shareholders. A more detailed version is named the 10-K report.
Investments & Financial Planning
In relation to mutual funds , what is a Back end loan fund ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
A Back-end loan fund is a mutual fund that charges investors a fee to sell or redeem shares. The fee ranges from 4% to 6%. Some back-end load funds impose a full commission if the shares are redeemed within a designated time such as one year. The commission decreases the longer the investor holds the shares. The formal name for the back-end load is the contingent deferred sales charge.
Investments & Financial Planning
What is a Certificate of Deposit ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
A Certificate of deposit is also known as a CD or a time deposit, This is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited. A Certificate of Deposit bears a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.
Investments & Financial Planning
What is a Dividend reinvestment plan ?
Asked Monday, November 06, 2000 by an anonymous userCPA Answer:
A Dividend reinvestment plan is a
automatic reinvestment of shareholder dividends in more shares of a company's stock. Generally, this occurs without commission fees. Some plans provide for the purchase of additional shares at a discount to market price. Dividend reinvestment plans allow shareholders to accumulate stock over the long term using "dollar cost averaging". The Dividend reinvestment plan is usually administered by the company without charges to the shareholder.
Investments & Financial Planning
Why do the Foreign Exchange Rates that I see in newspapers seem to be better than my own bank rates ?
Asked Friday, November 03, 2000 by an anonymous userCPA Answer:
Foreign Exchange rates in the newspaper are often "wholesale" or "interbank" rates that are generally only available to large corporations. These rates are not available to smaller retail customers who want to purchase foreign currency for an foreign trip. Generally, your bank rates will be competitive with other retail bank locations.
Investments & Financial Planning
Do I need to buy foreign currency before I leave for my trip to Europe ?
Asked Friday, November 03, 2000 by an anonymous userCPA Answer:
Using foreign currency purchased before you leave will mean you will have cash in hand for immediate expenses when you arrive such as taxis, trains, meals, tips etc. When you arrive at your destination the last thing you will want to do is deal with the hassle of standing on a long line to exchange currency at the airport.