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It explains many of the market buzzwords, including margin calls, earnings per share, yield to maturity, accrued interest, short sale, ex-dividend, puts and calls, and many other financial terms – all at a basic level. Each of the 20 chapters is supported by a 5-question multiple choice quiz and a series of exercises to ensure you understand the contents of the chapter.
TEAMFLY
S. Government Securities
The most creditworthy of all debt instruments is issued by the US Treasury. Also known as "Treasuries" or "Governments", they are backed by the full faith and credit (and taxing power) of the government. To summarize the taxation of the main types of bonds: Any capital gain resulting from trading in corporate, municipal or government bonds is taxable.
This is another example of the higher the price, the lower the yield. There are a number of government-sponsored items that are not direct obligations of the United States, but have some form of federal guarantee or sponsorship. As the bond trades at a premium (above par), the yield shown is the yield to be charged.
Since the interest will be paid to her in two equal semi-annual installments, each payment will be $41.25. The seller of the bond is entitled to receive interest up to, but not including, the settlement date of the sale. Since the seller is not entitled to actually receive the proceeds of the sale until the settlement date, it is logical that he is entitled to receive interest before that date.
Since the buyer will be the holder of the bond when it makes its next payment, it will receive the full payment, but is only entitled to part. Instead of receiving the full payment and then returning the appropriate portion to the seller, the buyer - on settlement date - pays the seller's portion, the accrued interest. The seller receives his interest at the time of the sale (it comes from the buyer, who pays him that interest in advance), and the buyer will receive the full coupon payment on the next interest payment date.
You pay half a week's wages in advance to the person whose work you are taking over, and then receive a full week's wages at the end of the week. You were entitled to the other half of the payment, and that is what you ended up with; you paid half a week's wages and received a full week's wages. The March 5 trade will settle on March 8 (three business days later), so Steve is entitled to receive interest from the last coupon date before the sale (January 1) up to, but not including, the trade settlement date.
S. GOVERNMENT NOTES AND BONDS
A bond's description usually includes its interest rate—the coupon rate—as well as its maturity year. This is the model for trading bonds at a discount - the current yield is always higher than the nominal yield (because fewer dollars have to be invested to earn the coupon) and the yield to maturity is higher still , reflecting the fact that at maturity the investor will receive the full nominal value for an investment smaller than par. Because bonds are bought primarily for their interest payments rather than their growth prospects, it is important to understand the principles of return - the investor's return.
The highest of the three yields should be the nominal yield, then the current yield, then the yield to maturity; and that's how they stack up: nominal yield 11.0%, current yield 10.7%, and yield to maturity 10.6%. Although the mutual fund has a simple capitalization – common shares only – the number of common shares outstanding is constantly changing. While there may be a little financial difficulty in paying taxes if there is no compensating cash flow, it can be considered a form of "forced saving." The reinvested amounts are in fact additional purchases and increase the costs of the holding company for the investor.
1YAC Call April 40 - "1" means this is 1 call, which conveys the right to buy 100 shares. That's the deal - you pay me a premium and I give you the right to buy shares at a strike price. The buyer of the option would lose the entire premium of $200 and the seller of the option would keep the entire premium – the same $200.
The owner of the option (said to be a long option) paid a premium (the price of the option) for this right. Because there is no intrinsic value, the price of the option – the premium – consists only of time value. The break-even point for a call is the same for both the buyer and the writer: the strike price plus the premium.
1IBM Oct 110 Put - "1" indicates that this is a put that gives the right to sell 100 shares. Here's the logic: The option has 2 points of intrinsic value because its owner can sell shares at 110 at a time when the stock's open market price is 108. If XYZ goes bankrupt—if the stock falls to zero—the put owner will make an overall profit of $9,050 on his modest investment.
The breakeven point for a put is the same for both the buyer and the writer: the strike price minus the premium. If all of these shares are bought, it is a very encouraging sign (as it indicates strong demand from big buyers) and the managing underwriter will be happy to announce: “The pot is clean!”.
Rangle Corporation
This announcement is not an offer to sell or a solicitation of an offer to buy any of these securities.
9 3/4% Subordinated Debentures due 2023 Price 100%
When an issue does not sell at the public offering price, the managing underwriter can "break" the syndicate and tell members: "You are on your own. They must be willing to buy and sell at all times - that is the essence of making a market There are three very large rooms that collectively make up the trading floor for stocks on the New York Stock Exchange: the Main Room (that's the one you see on TV), the Blue Room, and the Garage.
When an order for an NYSE-listed stock is received by a brokerage firm, it is sent to the floor to one of the firm's "phone booths." The clerk at the booth calls one of the floor partners, who gets the order executed. This verbal report will be followed by a written confirmation showing the details of the transaction. The NYSE has several automated systems for handling small market orders - the designated order turnaround (DOT) system and the SuperDot system for smaller limit orders.
Brokers can “hit” the bid or offer for some or all of the number of shares specified in the size. With few exceptions, a market order is executed at or very close to the price of the previous trade. Those who believe a stock is reasonably priced, whether buying or selling, traditionally use market orders rather than risk the stock not being executed by entering an order "outside" the market.
Buy stop orders are placed on the market. A practical application of the buy stop order would be to protect a short position against a large loss. Stop sell orders are placed below the market. A typical use of a sell stop would be to protect a profit on a long position. AON orders are valid for the remainder of the trading day on which they are entered.
The order will not necessarily be executed at the last trading price of the day. Day orders remain in effect for the remainder of the trading day on which they are entered, i.e. until the market closes on the same day. FALSE Day orders expire at the end of the trading day on which they are entered.
