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A strong dollar is one that has earned trust on an international scale. It reflects a reliable currency...at least, more reliable than that of othe...

Are monopolies evil? Should they be regulated? Should they be illegal? Monopolies in and of themselves, are neither good nor evil. How they conduct...

What's a yankee bond, and does it stick a feather in its cap and call it macaroni?

What is a Country Basket (Index Fund)? Investing internationally can be a challenge, as foreign exchange, different accounting rules, time zones an...

What are credit ratings and how are they interpreted? Credit ratings describe a borrower’s likelihood to pay back their debts; it’s a look at h...

What is the gold standard, besides the standard at which this video is judged? Hit play to find out.

PERLS is a bond that pays interest twice a year, but whose yield is linked to a given foreign exchange rate. It also doesn't string very well on a...

How do you judge the performance of an index fund? For index funds, they're really just a reflection of the stocks and bonds they, uh... reflect. S...

What is a balance sheet? A balance sheet is a financial document that public corporations are required to use. It shows their assets and liabilitie...

What is inflation, and if we poke it with a pin, will it pop?

Who invests in stocks? 401k plans, pension funds, institutional investors, banks, traders, clients of Schwab, Fidelity, and Franklin. Joe Blow buys...

What rights does a public stockholder have? Common shareholders elect the board of directors. They vote. They have the right to quarterly financial...

What is Coupon Stripping? Coupon stripping is the process of taking a coupon bearing bond and separating the coupons into individual zero coupon se...

What is a basis point? Basis points are how changes in financial securities are described. “The stock dropped 100 points” actually means that t...

What is a strike price? Strike prices are used in conjunction with options. Calls and puts give investors the right to buy or sell stocks at predet...

What is the process of a loan? Collateral. Do you have it? The bank lending you money wants to be sure that A) they get paid back, and B) they char...

What is Capital Gains Distribution? Owners of equity based mutual funds which are successful in investing will inevitably be the recipients of thei...

What are high yield/junk bonds? Junk bonds are called junk for a reason. They are really risky, but because of this risk, they can pay very well. T...

What are Bonds? The simplest explanation is that a bond is essentially an I.O.U. that is issued by a corporate or government institution to borrow...

What is the Free Rider Problem? The free rider problem occurs when people take more than their contributed fair share of a common resource. In the...

What is Balloon Interest or a Balloon Payment? Balloon interest happens when bonds with growing interest are held for a long time. A balloon payment happens when the largest payment (substantially larger than the others) occurs at the end of the loan.

You've seen routing numbers on checks before, but what do they actually do? Hit play to find out.

What is a Dual Currency Bond? Multinational corporations often find their books filled with foreign currencies from countries where they have businesses and have established their brand. One way in which they utilize some of these currencies is to enact securities underwriting that allows them to circulate interest payments in a different currency than repayment of principal. These hybrid securities are called Dual Currency Bonds. Due to the added foreign exchange risk to prospective bondholders, interest rates are usually higher than comparable single currency bonds from the same issuer.

What is an income statement? Income statements are important financial documents that all companies keep to track profitability. It shows figures that relate to revenues and expenses to show the company’s, well... income... for a period of time (quarterly, annually).

What are Aging Receivables/an Allowance for Doubtful Accounts? The allowance for doubtful accounts subtracts those receivables that are not going to be paid. It is referred to as doubtful because it is assumed, therefore an estimate, to an extent. An aging receivables report is used to list these receivables that won’t be paid specifically and give details.

Forced conversion: the idea that the issuer of a bond has the right to force the conversion of that bond into common stock.

What are Convertible Bonds? Convertible bonds are bonds that have a provision to be converted into equity common shares at a predetermined strike price. It is a means by which an investor can hedge a downside position by receiving coupon income and a return of principal at maturity on the bond, but benefit on the upside of stock appreciation via conversion if the listed market price rises beyond the strike price.

What is a Consolidated Income Statement? Consolidated income statements (or any financial statements) are just the statements of all businesses within the same parent company. They are referred to as consolidated because the parent company’s income statement also includes the financial information from all of its subsidiaries.

What is Accounts Receivable Turnover? This is usually called receivables turnover; it looks at how well a company is using its assets. Accounts receivable comes from what a company is owed after extending credit; since they do this, they have to have a solid system in place to collect on these debts. Accounts receivable turnover is used to make sure they do.

What are accounts receivable and accounts payable? Accounts receivable and payable are figures that show up on a company’s balance sheet. Accounts receivable includes all payments the company is owed (like purchasers buying on credit). On the other hand, accounts payable includes what they owe to others.

What is a CUSIP Number? All publicly tradable equities and fixed income securities in North America have 9 digit ID code numbers that are registered by the Committee on Uniform Securities Identification Procedures (CUSIP). These CUSIP numbers are used to identify, verify and track tradeable US and Canadian registered securities.

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They turn pockets inside-out, ping a bankruptcy judge, and then sell whatever residual value is retained in the company to the highest bidder.

What is an Exchange Rate? An exchange rate is what a domestic currency is worth in a foreign currency’s denomination and vice versa. An exchange rate can be floating, such as in the Forex spot market, where valuations can change by the second in real time, or fixed, meaning the currency has a peg with another currency, such as the Hong Kong dollar to the US Dollar 7.84 to 1 peg.

Businesses that have unrecoverable costs that would not be part of the equation for any further management decisions are said to be sunk costs. If your business was a bakery, your oven and mixing machines, for example, would be sunk costs, as they would not be factors as to what kind of pastries, cakes, or breads you would make. The oven and mixers would be deployed regardless. Choices of types of flour, sugar, molds, etc. would all be factors for calculating costs of production and pricing for sale.

What is a savings & loan versus a bank? Hit play to find out.

What is the student loan crisis? The student loan crisis describes the situation that faces our country; namely the fact that there is over a trillion dollars in student loan debt. The cost of college is so astronomical that many students struggle (or fail) to repay their student loans because payments exceed entry-level salaries. At the very least, it causes problems for the economy, because this huge chunk of people who have student loan debt often have close to no expendable income.

What is an Adjustable-Rate Mortgage (ARM)? An adjustable-rate mortgage is a mortgage that has a changing interest rate. Whatever it changes to is based on a pre-specified index and happens on a consistently periodic basis (monthly, yearly).

What is a Credit Limit? Financial institutions that lend money in the form of credit can do so in different facility configurations, usually with a line of credit and/or with a credit card. Each facility is part of a cumulative risk assessment of the borrower and is often capped with a Credit Limit in order to prevent the borrower from becoming over extended or if the account is subject to ID theft or other cyber crime. This affords both borrower and lender some protection, while allowing them other platform options to continue their business arrangement.

What is a line of credit? A line of credit is kind of like a loan. A bank gives a borrower a line of credit, which basically says they can borrow “x” amount of money, and then the borrower can take that money at any time they please. As long as they don’t take more than the maximum amount outlined by the line of credit, of course.

What are petrodollars and what do they have to do with dinosaurs?