What is the Term Structure Of Interest Rates? The term structure of interest rates is commonly known as the yield curve. When you invest money into interest-bearing security, the amount of interest paid will vary depending on the length of the investment term. In other words, a savings bond with […]
What Is the Times Interest Earned Ratio? The times interest earned ratio (TIE) is a measure of a company’s ability to meet its debt obligations based on its current income. The formula for a company’s TIE number is earnings before interest and taxes (EBIT) divided by the total interest payable […]
Common Stock vs Preferred Stock There are many differences between common stock vs preferred stock. However, a key difference has to do with voting rights. Preferred stock usually does not give shareholders voting rights. Common stock does, usually at one vote per share owned. Many investors know quite a bit […]
What Determines Stock Price? What determines stock price? Every time a stock is sold, the exchange records the price at which it changes hands. If a few seconds or minutes later another trade takes place, the price at which that trade is made becomes the new market price, and so […]
What is a Reverse Auction? A Reverse auction is initiated by the buyer – usually large corporations and governments. Suppliers then bid in real-time driving the price down. A reverse auction is a type of auction in which sellers bid for the prices at which they are willing to sell their goods and […]
What Is Positive Pay? Positive Pay is an automated risk management service. It is used by financial institutions employed to deter check fraud. Banks use positive pay to match the checks a company issues with those it presents for payment. Any check considered suspect is sent back to the issuer […]