Definition and Examples of a Collar A collar involves owning shares and using a combination of call and put options to limit the risk of loss on those shares in the short-term at the cost of limiting any potential gains as well. In effect, you pass up on profits from large price increases in exchange for avoiding losses from large drops in value. To do this, you must see a call option and buy a put option for the stock you want to place a collar on....
Many businesses rely on information from credit bureaus to approve your credit applications, set your pricing, and maintain your account. Credit bureaus don’t make decisions about your application, such as approving or denying a credit card application, but the information they have on record affects a major part of your life. Understanding how credit bureaus work can help you be sure your credit information accurately reflects your financial activity....
SDI Productions / Getty Images Alternate name: Credit inquiry How a Credit Check Works The three credit bureaus maintain reports on millions of borrowers, They receive regular updates on the status of your accounts from companies that have already loaned money to you. These updates are usually made once a month. The reports are used by the Fair Isaac Corp. (FICO) and by VantageScore to calculate your credit score, another critical indicator of your creditworthiness....
Knowing how the word is used in legal documents and court proceedings can help you better understand the estate distribution process. Alternate name: Deceased When someone dies, there are many financial issues that must be sorted out in relation to their estate. Ideally, the decedent will have named an executor prior to their death, who is responsible for filing taxes, paying off outstanding debts, and distributing any remaining assets. For example, say your spouse died....
Investors expect to get paid for taking risks in the form of higher returns. Investments such as savings accounts have little uncertainty. Stocks, on the other hand, can potentially lose money as well as reward investors. An investment with a higher level of risk, such as an individual stock, has a higher potential return than a savings account because it may not meet expectations, while the savings account will....
You can name a spouse or someone else as a QJSA beneficiary. If the beneficiary is a former spouse, child, or dependent, they’re technically treated as a surviving spouse under a qualified domestic relations order (QDRO). The amount QJSA pays the survivor ranges from 50% to 100% of the sum that was paid during the participant’s life. Generally speaking, your QJSA payments start when you reach your plan’s retirement age, and they stop when the surviving spouse dies....
How much damage the car needs to get a salvage title varies. In New York and most other states, the damage must equal at least 75% of a car’s retail value. But in some states, such as Florida, a vehicle gets a salvage title if the insurance company decides the vehicle is a total loss. A collision isn’t the only catastrophic event that causes a car to be given a salvage title....
Often, a company will offer a low introductory teaser rate to make its product appear cheaper. For example, an annuity provider may offer an initial high interest rate, but that rate may only be guaranteed for a limited period of Ïtime. Lenders may offer teaser rates in hopes you sign up for a loan or line of credit. Alternate names: introductory rate, promotional rate Another example of a teaser rate is a variable interest rate loan that has a low initial rate....
Initially, this was not an email that we could respond to because your home buying guide is a REALTOR®. As a fellow REALTOR®, she is prohibited from interfering in another REALTOR’s® transaction! Therefore, the only correct answer to this was to ask your agent what you should do about the verification of the property condition. However, now that this transaction is no longer an active situation, I am addressing the question in hopes of offering an explanation to other buyers....
They must follow the same banking laws and regulations that other banks do. They are regulated by the state in which they operate, and are supervised and insured by the Federal Deposit Insurance Corp. (FDIC). Alternate name: industrial loan companiesAcronym: ILC An example of an industrial bank is BMW Bank of North America. BMW Bank is an industrial bank that offers in-house banking services to BMW and BMW MINI Cooper customers, dealerships, and affiliates....
Since this bill can come as a shock, it’s also known as “surprise billing.” Unfortunately, it’s a fairly common scenario. Researchers found that over 20% of patients having surgery at an in-network hospital with in-network physicians ended up with thousands of dollars worth of unexpected out-of-network charges. However, out-of-network providers aren’t bound by the same restrictions and are free to bill you for the remaining fees. It’s important to consider all potential costs when determining whether to choose an in-network or out-of-network provider....
For instance, if a central bank wanted to increase the value of its currency, it might intervene in foreign exchanges and buy its own currency. Alternate names: Foreign exchange intervention, forex intervention How Does Currency Intervention Work? At some point, a central bank may feel like its currency is appreciating (gaining value) or depreciating (losing value) too quickly. This may be cause for it to conduct currency intervention to slow the movement....
A more thorough knowledge of how EAR works and how to calculate it can provide you with an accurate way to compare credit cards, loans, and investments that have annual interest rates and different compounding periods. What Is Effective Annual Interest Rate? EAR is the interest rate that factors in compounding interest (interest charged on interest) over a given amount of time. For example, a balance due on a credit card may include interest....
For example, if you broke your foot while at the office, you would file for workers’ compensation to have your medical bills paid by the company. However, if you believed that the coverage was not enough or that your employer was negligent, you might sue the company. This is where employer’s liability insurance would kick in—to help with the associated legal costs. Another example would be if you contracted a serious illness that was found to be work-related....
Alternate names: Contractors equipment insurance, commercial contractors equipment insurance, equipment floater insurance Equipment insurance policies can cover small or large tools, rented or borrowed equipment, work-related clothing, and more. For example, let’s say a general contractor is working on a remodeling project at a house in a suburban development. The contractor typically leaves their tools at the worksite. But one night, the house is broken into and their tools are stolen....
Ether, the Ethereum network’s native coin, is the second-largest cryptocurrency globally by market capitalization and is popular for investing, trading, and other cryptocurrency-related activities. Like other cryptocurrencies, all transactions are publicly recorded in a large database called a blockchain. You can use Etherscan to learn more about the transactions on the Ethereum network spanning from transfer for coins to purchase of non-fungible tokens (NFTs). Learn more about Etherscan, how it works, and why you may want to use it in your cryptocurrency strategy....
Implemented by the Financial Accounting Standards Board (FASB) to standardize the calculation of financial instruments by looking at their historical cost, fair value accounting is one of the most widely recognized valuation standards. Fair value accounting is an important step when determining the value of a company, especially when the company is sold, assets are acquired, or strategic investments are made. Alternate name: Mark-to-market accounting For example, say your business acquires a delivery truck worth $10,000....
The U.S. Census Bureau includes any individuals age 15 or older, regardless of whether they’re related. Household income includes what each of them earns, even if they don’t use their money to support the household. This might be the case with a 17-year-old who works a part-time job and uses the income purely for their own enjoyment. This income can be included, particularly at the state level. Many households consist of only one individual, without roommates or family members who reside with them....
Definition and Examples of Intraday Intraday means “within the day” and is a term commonly used by traders to refer to the time between the market’s open and close. The stock market’s core trading hours start at 9:30 a.m. ET and end at 4 p.m. on weekdays (with the exception of holidays). In other financial shorthand, intraday is used when referring to the movements or trends of a security that happened within the trading day....
While many financial professionals agree that life insurance is an integral part of financial planning, the average person might not be clear on how life insurance can benefit them or whether they even need it. Let’s take a closer look at what you need to know about life insurance and how it might fit into your financial plans. What Is Life Insurance? At its core, life insurance is a contract drawn up between an insurance company and a policyholder....
