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what is anchoring and adjustment | anchoring and adjustment is a phenomenon wherein an individual bases their initial ideas and responses on one point of information and makes changes driven by that starting point the anchoring and adjustment heuristic describes cases in which a person uses a specific target number or value as a starting point known as ... | |
what is an angel investor | an angel investor provides initial seed money for startup businesses usually in exchange for ownership equity in the company the angel investor may be involved in a series of projects on a purely professional basis or may be found among an entrepreneur s family and friends the investor s involvement may be a one time i... | |
what kind of ideas get angel investor financing | it may be most closely associated with the silicon valley tech industry but some angels look far afield for good ideas to bankroll ask for funding a site for entrepreneurs lists recent ideas that have gotten backing from their members they include a plan to build a franchise of archery facilities a quick dissolving tab... | |
what s the difference between an angel investor and a venture capitalist | venture capitalists deploy vast sums of cash pooled from many investors they have big money to spend and tend to spend it only on existing businesses that they think have an opportunity to turn a substantially bigger profit for example they might buy a moribund retail chain with the goal of revitalizing it over the nex... | |
what are the disadvantages of angel investing to an entrepreneur | the entrepreneur is giving up a share of the company and its future profits in return for angel investing many angel investors want some control over the development of the product as well they often want a seat on the board or its equivalent the bottom lineangel investing has grown over the past few decades into a pri... | |
what are animal spirits | animal spirits is a term coined by the famous british economist john maynard keynes to describe how people arrive at financial decisions including buying and selling securities in times of economic stress or uncertainty in keynes s 1936 publication the general theory of employment interest and money1 he speaks of anim... | |
what is the annual equivalent rate aer | the annual equivalent rate aer is the interest rate for a savings account or investment product that has more than one compounding period aer is calculated under the assumption that any interest paid is included in the principal payment s balance and the next interest payment will be based on the slightly higher accoun... | |
how to calculate the aer | to calculate aer the aer is displayed as a percentage example of aerlet s look at aer in both savings accounts and bonds assume an investor wishes to sell all the securities in their investment portfolio and place all the proceeds in a savings account the investor is deciding between placing the proceeds in bank a bank... | |
where can i find an aer calculator online | there are many websites that offer tools for calculating aer including the websites calculator soup get calc and omni calculator | |
what is a nominal interest rate | the nominal interest rate is the advertised or stated interest rate on a loan without taking into account any fees or compounding of interest the nominal interest rate is what is specified in the loan contract without adjusting for compounding once the compounding adjustment has been made this is the effective interest... | |
what is a real interest rate | a real interest rate is an interest rate that has been adjusted to remove the effects of inflation real interest rates reflect the real cost of funds in the case of a loan and a borrower and the real yield or roi for an investor the real interest rate of an investment is calculated as the difference between the nominal... | |
what is an annual general meeting agm | an annual general meeting agm is a yearly gathering of a company s interested shareholders at an agm the directors of the company present an annual report containing information for shareholders about the company s performance and strategy 1shareholders with voting rights vote on current issues such as appointments to ... | |
how an annual general meeting agm works | an annual general meeting or annual shareholder meeting is primarily held to allow shareholders to vote on both company issues and the selection of the company s board of directors in large companies this meeting is typically the only time during the year when shareholders and executives interact 1the exact rules gover... | |
what is annual percentage rate apr | annual percentage rate apr refers to the yearly interest generated by a sum that s charged to borrowers or paid to investors apr is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan or income earned on an investment this includes any fees or additional costs associated wi... | |
how the annual percentage rate apr works | an annual percentage rate is expressed as an interest rate it calculates what percentage of the principal you ll pay each year by taking things such as monthly payments and fees into account apr is also the annual rate of interest paid on investments without accounting for the compounding of interest within that year t... | |
why is the annual percentage rate apr disclosed | consumer protection laws require companies to disclose the aprs associated with their product offerings in order to prevent companies from misleading customers for instance if they were not required to disclose the apr a company might advertise a low monthly interest rate while implying to customers that it was an annu... | |
how do you calculate apr | the formula for calculating apr is straightforward it consists of multiplying the periodic interest rate by the number of periods in a year in which the rate is applied the exact formula is as follows apr fees interestprincipaln 365 100where interest total interest paid over life of the loanprincipal loan amountn numbe... | |
what is the annual percentage yield apy | the annual percentage yield apy is the interest rate earned on an investment in one year including compounding interest a higher apy is better as your return will be higher you can compare apys at different financial institutions to ensure you re opening an account with the highest possible return investopedia julie ba... | |
what apy can tell you | any investment is ultimately judged by its rate of return whether it s a certificate of deposit cd a share of stock or a government bond the rate of return is simply the percentage of growth in an investment over a specific period of time usually one year however rates of return can be difficult to compare across diffe... | |
how compound interest works | the premise of apy is rooted in the concept of compounding or compound interest compound interest is the financial mechanism that allows investment returns to earn returns of their own imagine investing 1 000 at 6 compounded monthly at the start of your investment you have 1 000 after one month your investment will hav... | |
when a consumer holds money in a savings account the consumer may not have immediate need the consumer may need to transfer funds to their checking account before they can be used savings accounts usually have higher apys than checking accounts because consumers face greater limits with them | in addition when consumers hold a certificate of deposit they agree to sacrifice liquidity and access to funds in return for a higher apy the consumer can t use or spend the money in a cd without paying a penalty the apy on a cd is often the highest as the consumer is being rewarded for sacrificing immediate access to ... | |
what is apy and how does it work | apy is the annual percent yield that reflects compounding on interest it reflects the actual interest rate you earn on an investment because it considers the interest you make on your interest consider the example above where the 100 investment yields 5 compounded quarterly during the first quarter you earn interest on... | |
what is a good apy rate | apy rates fluctuate often and a good rate at one time may no longer be a good rate due to shifts in macroeconomic conditions in general when the federal reserve raises interest rates the apy on savings accounts tends to increase therefore apy rates on savings accounts are usually better when monetary policy is tight or... | |
how is apy calculated | apy standardizes the rate of return it does this by stating the real percentage of growth that will be earned in compound interest assuming that the money is deposited for one year the formula for calculating apy is 1 r n n 1 where r period rate and n number of compounding periods | |
how can apy assist an investor | any investment is ultimately judged by its rate of return whether it s a certificate of deposit a share of stock or a government bond apy allows an investor to compare different returns for different investments on an apples to apples basis allowing them to make a more informed decision | |
what is the difference between apy and apr | apy calculates the rate earned in one year if the interest is compounded and is a more accurate representation of the actual rate of return apr includes any fees or additional costs associated with the transaction but it does not take into account the compounding of interest within a specific year rather it is a simple... | |
what is an annual report | an annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions the report chronicles the company s activities over the past year may make forecasts about the future and contains detailed financial and operational information investo... | |
what s included | annual reports became a regulatory requirement for public companies following the stock market crash in 1929 when lawmakers mandated standardized corporate financial reporting it includes public disclosure of a company s operating and fiscal activities for the previous year the report is typically issued to shareholder... | |
how do companies write an annual report | an annual report has a few sections and steps that must convey a certain amount of information much of which is legally required for public companies most public companies hire auditing companies to write their annual reports an annual report begins with a letter to the shareholders then a brief description of the busi... | |
is an annual report the same as a 10 k filing | an annual report is similar to the 10 k filing in that both report on the company s activity both are considered the last financial filing of the year and summarize how the company performed annual reports are much more visually friendly with images and graphics the 10 k filing only reports numbers and other qualitativ... | |
what is a 10 q filing | a 10 q filing is a form filed with the securities and exchange commission sec that reports quarterly earnings most public companies have to file a 10 q with the sec to report their financial position for the quarter the bottom linepublic companies must produce annual reports to show their current financial conditions a... | |
what is an annual return | an annual return is the return that an investment provides over time it s expressed as a time weighted annual percentage sources of returns can include dividends returns of capital and capital appreciation the rate of annual return is measured against the initial amount of the investment and it represents a geometric m... | |
what is the modified dietz formula | the modified dietz formula is a method of annual return calculation that takes your cash flow into account it compounds returns over each period 3 | |
are there other ways to calculate annual return | you can calculate your rate of return by month and then multiply the result by 12 to get your annual rate of return numerous calculators are available online to do the math for you 4 | |
how can i calculate my overall return on an investment | calculate your return on investment ro by subtracting the initial cost of your investment from its final value divide the result by the overall cost of the investment adding in fees commissions and mark ups multiply this result by 100 to get a percentage the bottom linecalculating annual return tells you how much you r... | |
what is annual turnover | annual turnover is the percentage rate at which something changes ownership over the course of a year for a business this rate could be related to its yearly turnover in inventories receivables payables or assets in investments a mutual fund or exchange traded fund etf turnover rate replaces its investment holdings on ... | |
what is annualization | to annualize a number means to convert a short term calculation or rate into an annual rate typically an investment that yields a short term rate of return is annualized to determine an annual rate of return which may also include compounding or reinvestment of interest and dividends it helps to annualize a rate of ret... | |
when a number is annualized the short term performance or result is used to forecast the performance for the next twelve months or one year below are a few of the most common examples of when annualizing is utilized | an annualized return is similar to a run rate which refers to the financial performance of a company based on current financial information as a predictor of future performance the run rate functions as an extrapolation of current financial performance and assumes that current conditions will continue the annualized co... | |
why might an investor annualize a stock s one month return | investors may annualize a stock s one month return to forecast its performance over the next 12 months understanding a stock s longer term returns can help investors better manage their risk and compare performance against other benchmarks | |
what periods do investors typically annualize | investors annualize returns of less than one year as mentioned a monthly rate of return is often annualized to project the returns on a stock over the next 12 months quarterly figures are also frequently annualized when analyzing a company s metrics such as its earnings and sales | |
why is understanding annualization important when determining loan costs | understanding annualization allows borrowers to better understand the annual costs associated with a loan most lenders display an apr which is the yearly rate of costs such as fees and interest expressed as a percentage of the amount borrowed | |
what is the main limitation of annualizing | the primary drawback of annualizing a return is that it can change over time due to outside factors and market conditions stock market volatility a company s financial performance and macroeconomic conditions can all significantly impact yearly returns the bottom lineannualize refers to converting a short term number s... | |
what is annualized income | annualized income is an estimate of the amount of money that an individual a business or an investment generates over a year s time it is calculated based on less than one year s worth of data so it is only an approximation of total income for the year annualized income numbers are useful for creating a budget and for ... | |
how estimated tax payments work | taxpayers who have jobs pay an estimate of their annual taxes through employer tax withholdings business owners make estimated tax payments each quarter there are many other sources of income that are not subject to tax withholding income from self employment interest and dividend income and capital gains income are no... | |
what is the formula for annualized income | the formula is simple if you have 12 months of data add up the monthly income received during a period of 12 months divide by 12 there s your annualized income if you have less than 12 months of data multiply the earned income figure by the ratio of the number of months in a year divided by the number of months for whi... | |
why would i want to annualize my income | if your income varies drastically throughout the year calculating your annualized income helps you budget sensibly if for example you grow christmas trees for a living most or all of your income will come at the end of the year but you have to cover your monthly expenses for the entire 12 months annualizing gives you a... | |
should i annualize income for my business | if you re running your own business you re paying your estimated taxes due on a quarterly basis many businesses experience big swings in revenue seasonally calculating your business annualized revenue allows you to budget properly for the entire year it also helps you estimate the taxes you owe accurately the bottom li... | |
what is the annualized income installment method | taxpayers who are self employed typically pay quarterly installments of their estimated tax in four even amounts as figured by the regular installment method additionally taxpayers should pay estimated taxes if they receive substantial dividends interest alimony or other forms of income that are not subject to income t... | |
how the annualized income installment method works | the purpose of the regular installment method is to figure in quarterly tax installments it divides the annual estimated tax into four equal segments the resulting payments are appropriate for the quarterly estimated taxes of taxpayers with a steady income but this does not work as well for taxpayers whose income fluct... | |
how do i annualize my income for the annualized income installment method | unlike our scenario above in real life you will not already know your full annual tax payment when your quarterly estimated tax payment is due instead you will have to estimate your annual tax payment by annualizing your income from the beginning of the year until the end of the period in which you are paying taxes bec... | |
what is the tax form for the annualized income installment method | the annualized method can be calculated using irs form 2210 3i owed 500 when i filed my tax return do i need to file form 2210 no there is no underpayment penalty if the difference between your total tax on your return and the amount of tax you paid through withholding is less than 1 000 | |
what is an annualized rate of return | an annualized rate of return is calculated as the equivalent annual return an investor receives over a given period the global investment performance standards dictate that returns of portfolios or composites for periods of less than one year may not be annualized 1 this prevents projected performance in the remainder ... | |
what is the difference between annualized rate of return and annual performance | the annualized rate of return of an investment is expressed as a percentage consistent over the years that an investment provides returns annualized return also takes compound interest into account annual performance is a snapshot of an investment s gains and losses in a single year which can change substantially depen... | |
how can the annualized rate of return help you understand your investments | investors hold different types of investments for varying periods of time annualized rate of return can help investors compare the performance of diverse investments | |
what are the limitations of an annualized rate of return | annualized rate of return can be a useful tool to understand your investment outlook but it is not a guarantee market volatility and other outside forces can change an investment s annualized rate of return the bottom lineannualized rate of return calculates return on investment as an annual average over a given period... | |
what is annualized total return | an annualized total return is the geometric average amount of money an investment earns each year over a given period the annualized return formula is calculated as a geometric average to show what an investor would earn over some time if the annual return were compounded an annualized total return provides only a snap... | |
how is annualized total return calculated | the annualized total return is a metric that captures the average annual performance of an investment or portfolio of investments it is calculated as a geometric average meaning that it captures the effects of compounding over time the annualized total return is sometimes called the compound annual growth rate cagr | |
what is the difference between an annualized total return and an average return | the key difference between the annualized total return and the average return is that the annualized total return captures the effects of compounding whereas the average return does not | |
what is the difference between the annualized total return and the compound annual growth rate cagr | the annualized total return is conceptually the same as the cagr in that both formulas seek to capture the geometric return of an investment over time the main difference is that the cagr is often presented using only the beginning and ending values whereas the annualized total return is typically calculated using the ... | |
what is an annuitant | an annuitant is an individual who is entitled to collect the regular payments of a pension or an annuity investment the annuitant may be the contract holder or another person such as a surviving spouse annuities are generally seen as retirement income supplements they may be tied to an employee pension plan or a life i... | |
what is annuitization | annuitization is the process of converting an annuity investment into a series of periodic income payments annuities may be annuitized for a specific period or for the life of the annuitant annuity payments may only be made to the annuitant or to the annuitant and a surviving spouse in a joint life arrangement annuitan... | |
how annuitization works | upon receiving the lump sum of capital the life insurer makes calculations to determine the annuity payout amount the key factors used in the calculation are the annuitant s current age life expectancy and the projected interest rate the insurer will credit to the annuity balance the resulting payout rate establishes t... | |
what is an annuity | an annuity is an insurance contract issued and distributed by financial institutions and bought by individuals an annuity requires the issuer to pay out a fixed or variable income stream to the purchaser beginning either at once or at some time in the future people invest in or purchase annuities by making monthly prem... | |
how an annuity works | annuities are designed to provide a steady cash flow for people during their retirement years to alleviate the fear of outliving their assets since these assets may not be enough to sustain their standard of living some investors may turn to an insurance company or other financial institution to purchase an annuity con... | |
what is a non qualified annuity | annuities can be purchased with either pre tax or after tax dollars a non qualified annuity is one that has been purchased with after tax dollars a qualified annuity is one that has been purchased with pre tax dollars qualified plans include 401 k plans and 403 b plans only the earnings and not the contributions of a n... | |
what is an annuity fund | an annuity fund is an investment portfolio in which an annuity holder s payments are invested it can contain stocks bonds and other securities the annuity fund earns returns which correlate to the payout that an annuity holder receives | |
what is the surrender period | the surrender period is the amount of time an investor must wait before they can withdraw funds from an annuity without facing a penalty withdrawals made before the end of the surrender period can result in a surrender charge which is essentially a deferred sales fee this period generally spans several years the bottom... | |
what is an annuity | an annuity is an insurance contract issued and distributed by financial institutions and bought by individuals an annuity requires the issuer to pay out a fixed or variable income stream to the purchaser beginning either at once or at some time in the future people invest in or purchase annuities by making monthly prem... | |
how an annuity works | annuities are designed to provide a steady cash flow for people during their retirement years to alleviate the fear of outliving their assets since these assets may not be enough to sustain their standard of living some investors may turn to an insurance company or other financial institution to purchase an annuity con... | |
what is a non qualified annuity | annuities can be purchased with either pre tax or after tax dollars a non qualified annuity is one that has been purchased with after tax dollars a qualified annuity is one that has been purchased with pre tax dollars qualified plans include 401 k plans and 403 b plans only the earnings and not the contributions of a n... | |
what is an annuity fund | an annuity fund is an investment portfolio in which an annuity holder s payments are invested it can contain stocks bonds and other securities the annuity fund earns returns which correlate to the payout that an annuity holder receives | |
what is the surrender period | the surrender period is the amount of time an investor must wait before they can withdraw funds from an annuity without facing a penalty withdrawals made before the end of the surrender period can result in a surrender charge which is essentially a deferred sales fee this period generally spans several years the bottom... | |
what is an annuity table | an annuity table is a tool for determining the present value of an annuity or other structured series of payments such a tool used by accountants actuaries and other insurance personnel takes into account how much money has been placed into an annuity and how long it has been there to determine how much money would be ... | |
how an annuity table works | an annuity table provides a factor based on time and a discount rate interest rate by which an annuity payment can be multiplied to determine its present value for example an annuity table could be used to calculate the present value of an annuity that paid 10 000 a year for 15 years if the interest rate is expected to... | |
what is an annuity | an annuity is an insurance contract that provides an income stream typically during retirement an annuity may be fixed variable or indexed there are two phases first the accumulation savings phase then the payout income phase the payout may be immediate or deferred | |
what is the difference between an ordinary annuity and an annuity due | an ordinary annuity generates payments at the end of the annuity period while an annuity due is an annuity with the payment expected or paid at the start of the payment period can a lottery winner use an annuity table a lottery winner could use an annuity table to determine whether it makes more financial sense to take... | |
what is an anomaly | in economics and finance an anomaly is when the actual result under a given set of assumptions is different from the expected result predicted by a model an anomaly provides evidence that a given assumption or model does not hold up in practice the model can either be a relatively new or older model understanding anoma... | |
what is an anti dilution provision | anti dilution provisions are clauses built into convertible preferred stocks and some options to help shield investors from their investment potentially losing value when new issues of a stock hit the market at a cheaper price than that paid by earlier investors in the same stock then equity dilution can occur anti dil... | |
when the number of shares outstanding increases each existing stockholder owns a smaller or diluted percentage of the company making each share less valuable | sometimes the company receives enough cash in exchange for the shares that the increase in the value of the shares offsets the effects of dilution but often this is not the case anti dilution provisions at workdilution can be particularly vexing to preferred shareholders of venture capital deals whose stock ownership m... | |
what is an anti dumping duty | an anti dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home or its domestic market i... | |
what is anti money laundering aml | anti money laundering is an international web of laws regulations and procedures aimed at uncovering money that has been disguised as legitimate income for centuries governments and law enforcement agencies have tried to fight crime by following the money in modern times that comes down to anti money laundering aml law... | |
what is considered anti money laundering | anti money laundering aml refers to legally recognized rules national and international that are designed to thwart hiding criminal profits inside the financial system customer due diligence cdd refers to practices that financial institutions implement to detect and report aml violations know your customer kyc also kno... | |
what is an example of anti money laundering | financial institutions are required by law to gather information on customers track deposits and outflows and report any suspicious activity | |
what are the 3 stages of money laundering | the three stages are placement depositing layering obscuring through many transactions and integration or extraction using for large purchases or withdrawing the bottom linegovernments have evolved their approach to money laundering deterrence by establishing and revising regulatory controls that elicit proactive parti... | |
what is an anticipatory breach | an anticipatory breach of contract is an action that shows one party s intention to fail to fulfill its contractual obligations to another party an anticipatory breach can end the counterparty s responsibility to perform its duties demonstrating the other party s intention to breach the contract gives the counterparty ... | |
what is antitrust | antitrust laws are regulations that encourage competition by limiting the market power of any particular firm this often involves ensuring that mergers and acquisitions don t overly concentrate market power or form monopolies as well as breaking up firms that have become monopolies antitrust laws also prevent multiple ... | |
what are antitrust laws and are they necessary | antitrust laws were implemented to prevent companies from getting greedy and abusing their power without these regulations in place many politicians fear that big businesses would gobble up the smaller ones this would result in less competition and fewer choices for consumers potentially leading to higher prices lower ... | |
how many antitrust laws are there | there are three federal antitrust laws in effect today the sherman act the federal trade commission act and the clayton act 1who enforces antitrust laws the federal trade commission ftc and the u s department of justice doj are responsible for making sure that antitrust laws are abided by the ftc mainly focuses on segm... | |
what are appellate courts | appellate courts also known as the court of appeals are the part of the american judicial system that is responsible for hearing and reviewing appeals from legal cases that have already been heard in a trial level or other lower court persons or entities such as corporations that experience an unsuccessful outcome in a... | |
how appellate courts work | appellate courts review the decisions of lower courts to determine if the court applied the law correctly they exist as part of the judicial system to provide those who have judgments made against them an opportunity to have their case reviewed a publicly traded company with an unfavorable judgment against it will like... | |
what is the applicable federal rate afr | the applicable federal rate afr is the minimum interest rate that the internal revenue service irs allows for private loans each month the irs publishes a set of interest rates that the agency considers the minimum market rate for loans 1 any interest rate that is less than the afr would have tax implications the irs p... | |
which afr rate to use for a family loan would depend on the length of time designated for payback 6 let s say you were giving a loan to a family member for 10 000 to be paid back in one year you would need to charge the borrower a minimum interest rate of 4 30 for the loan in other words you should receive 430 in inter... | in our example above any rate below 4 30 could trigger a taxable event for example let s say you gave the same loan but you didn t charge any interest by not charging any interest you would have foregone 430 in interest income and according to the irs it would be considered a taxable gift any interest rate charged belo... | |
when preparing to make a loan between related parties taxpayers should consider two factors to select the correct afr the length of the loan should correspond to the afrs short term three years or less mid term up to nine years and long term more than nine years 4 | if the lender charges interest at a lower rate than the proper afr the irs may reassess the lender and add imputed interest to the income to reflect the afr rather than the actual amount paid by the borrower also if the loan is more than the annual gift tax exclusion it may trigger a taxable event and income taxes may ... | |
how often is the afr determined | the afr is released monthly with updated interest rates based on the market interest rates | |
does my loan agreement with a family member have to be notarized | no while notarization may take it the next step your written and signed agreement is legally binding on its own 8the bottom linethe applicable federal rate exists to set a standard for what differentiates a gift from a loan check this rate before loaning money to anyone if you charge an interest rate less than this ben... | |
what is an application programming interface api | an application programming interface api is a set of programming codes that queries data parse responses and sends instructions between one software platform and another apis are used extensively in providing data services across a range of fields and contexts apis have become increasingly popular tools with the likes ... | |
where to find apis for traders | the most popular brokers supporting api access in the traditional stock and futures markets include tradestation tdameritrade and interactivebrokers but many smaller brokers have expanded access over time apis are more common among forex brokers where third party applications and trading systems such as metatrader have... | |
what is an application specific integrated circuit asic miner | an application specific integrated circuit asic is an integrated circuit chip designed for a specific purpose an asic miner is a device that uses asics for the sole purpose of mining digital currency generally each asic miner is constructed to mine a specific digital currency based on their hashing algorithms one way t... | |
how an application specific integrated circuit asic miner works | instead of being general purpose integrated circuits like ram chips pc processors or mobile device microprocessors asics employed in cryptocurrency mining are custom designed to mine cryptocurrencies by only generating hashes the chips are designed to compute one or a few hashing algorithms they are placed on an integr... | |
what is the meaning of asic | asic stands for application specific integrated circuit these special circuits can be designed for any purpose but in cryptocurrency they are built for mining |
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