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What is common stock? Ownership. Common shareholders own a pro rata slice of the pie. They elect the board of directors by vote. Some companies hav...

What is the Efficient Markets Theory? The Efficient Markets Theory says that stocks trade at their fair value all of the time, assuming all informa...

What is amortization? Amortization tracks the decline in value of a contract or service, usually paid for in advance. You received $10,000 in advan...

How do you become incorporated? Go to Legal Zoom. Pay $150, file with the state of Delaware or whoever each year. Pay another $150. Most file as LL...

So... what's a TSA worker, and what do they do? Oh, we thought maybe you knew. Okay, okay... so TSA (or Transportation Security Administration) wor...

How do some accountants “cook the books”? Cooking the books refers to accountants making company’s financials look much better than they are....

Financial projections are calculations for profit and loss after factoring in expenses, gross revenues, cash flow, debt, and a host of pertinent fi...

The cost of equity is essentially how much the total returns, i.e. capital appreciation plus any dividends, are needed to keep shareholders from se...

What are the Major Classes of Bonds? Insofar as US dollar denominated bonds go, the primary classes of bonds are: 1) US Treasury Bonds; 2) US Treas...

What is Cash on Delivery (COD)? In transactions where buyer and seller are not physically in the same place, a Cash on Delivery transaction is one...

What Does it Mean to Churn an Account? While the occurrence now is much lower than in the past, brokers who were given limited trading discretion i...

What is the Federal Funds Rate? The federal funds rate is the interest rate used for overnight lending between banks. The amount banks are able to...

The Investment Company Act of 1940 regulated and ensured fair dealings in the mutual fund industry.

An interest-only mortgage is a mortgage on which you only pay the rent on money borrowed, rather than on the principal.

A regular trust is a legal vehicle into which assets are placed so that it is legally clear who is to receive what. A living trust is a established...

What is Characteristic Line? Technical analysts’ stock in trade are their charts, which crunch the numerical data from past trading dates to asse...

What Does "Capital Intensive" Mean? “Capital Intensive” refers to those industries that require a high level of capital investment before busin...