Author: Arabian Media staff

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Foreign currency exchanges (forex) run constantly across the globe through over-the-counter markets. The boundaryless space allows seamless access. For example, an Australian trader can trade in euros and Japanese yen (EURJPY) through a U.S.-based broker despite geographical boundaries. Speculative trading in the retail forex market continues to grow. As a result, there can be intermediaries (banks or brokers) who engage in financial irregularities, scams, exorbitant charges, hidden fees, and high-risk exposure offered through high-leverage levels or other bad practices. Internet and mobile app-based trading allow smooth trading processes, but they also add the risk of unrecognized sites that may close unexpectedly and abscond with investors’ money. Regulations ensure…

Benchmarking is an important tool in the financial world. Companies, hedge funds, mutual funds, investors, and other financial bodies pick a specific benchmark in the industry and seek to replicate its returns or to compare their own performance to that of the benchmark. Of course, the company’s business plan or investing strategy has to be the same or similar to that of the benchmark to make it a worthwhile comparison. Companies and banks typically use ratios as benchmarks, such as liquidity ratios and debt ratios, as opposed to investment firms that typically use market index benchmarks, such as the S&P…

In accounting, finance, and economics, all sunk costs are fixed costs. However, not all fixed costs are considered to be sunk. The defining characteristic of sunk costs is that they cannot be recovered. It’s easy to imagine a scenario where fixed costs are not sunk; for example, equipment might be resold or returned at the purchase price. Individuals and businesses both incur sunk costs. For example, someone might drive to the store to buy a television, only to decide upon arrival not to make the purchase. The gasoline used in the drive is a sunk cost—the customer cannot demand that the…

The owner of a long call for a stock is entitled to a dividend only if the option is exercised prior to the ex-dividend date, which is usually a few days prior to the record date. The record date is the date upon which a company ascertains who its shareholders are to either provide a dividend payment or allow shareholders to take other types of corporate actions. The ex-dividend date is the deadline for the exchange to own the stock to receive the dividend. It is prior to the record date. This allows the exchange time to process the paperwork…

Conventional wisdom says higher interest rates cause bond prices to fall. Big bond fund manager PIMCO, exchange-traded funds giant BlackRock, Inc. (BLK) and U.S. Bancorp (USB) say it as well. But the federal funds rate is not a generic interest rate, and its influence on prices of bonds of varying types and maturities has been much less decisive than often imagined. Key Takeaways Bond prices typically fall when the Federal Reserve raises interest rates, but the impact varies based on a bond’s duration and maturity. Longer-maturity bonds are generally more sensitive to rate changes due to their higher duration.The Federal…

Dell stock does not exist today, but the company may soon make its way back into the stock market. Dell’s founder, Michael Dell, took the company private in 2013, but before that time, Dell was a publicly traded company under the symbol DELL. The company had its initial public offering (IPO) in 1988 and was publicly traded until the privatization deal was approved in 2013. The agreement to take the company private was valued at around $24.9 billion. Michael Dell partnered with Silver Lake Partners, a prominent private equity firm, to take the company private to allow it to focus more…

The Chartered Financial Analyst (CFA) designation is one of the most respected and sought-after designations in the finance and investment worlds. A Chartered Financial Analyst (CFA) is a globally recognized designation awarded by the CFA Institute to professionals who have demonstrated a high level of knowledge in the investment field. Key Takeaways The Chartered Financial Analyst (CFA) designation is highly respected in the finance world and focuses on real-world investment analysis and portfolio management skills.Earning the CFA designation requires passing three levels of rigorous exams, having at least 36 months of qualified work experience, and committing to ethical standards.Financial advisors…

The terms saving and investing are sometimes used interchangeably, but they are very different. One main difference is risk: saving typically comes with less risk than investing. But with risk comes the potential for higher returns. In this article, we will cover what saving is, what investing is, and the pros and cons of each, along with examples to help understand these concepts better. Key Takeaways Saving is an excellent way to meet short- and long-term financial goals and prepare for unexpected situations, such as a car repair or medical bills. There’s little risk that you’ll lose money by saving…

What Is the 50/30/20 Rule? The 50-30-20 rule involves splitting your after-tax income into three categories of spending: 50% goes to needs, 30% goes to wants, and 20% goes to savings. U.S. Sen. Elizabeth Warren popularized the 50-20-30 budget rule in her book, “All Your Worth: The Ultimate Lifetime Money Plan.” This intuitive and straightforward rule can help you draw up a reasonable budget that you can stick to over time to meet your financial goals. Key Takeaways The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you…