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What is the Ethereum Virtual Machine?

What is the Ethereum Virtual Machine?

Ethereum has a Turing-complete platform built into it that allows the blockchain to function like a large distributed computer. The Ethereum Virtual Machine is a part of every Ethereum client software on the blockchain, and it allows the interconnected computers to function as one processor. Distributed computation such as this is not really a new thing, but the fact that it allows all developers in Ethereum to decentralized their projects makes this one of the most revolutionary aspects of the Ethereum platform. Continue reading...

How Do You Accept Bitcoin Payments for Your Store?

How Do You Accept Bitcoin Payments for Your Store?

Several services make it easy to accept bitcoin payments, or a programmer can help you set up your own node. The most convenient way to accept bitcoin payments as a merchant is to use the services made available by exchanges like Coinbase and Bitpay, who make it simple enough to add a button to your website and to accept payments in person via NFC and QR codes. These exchanges have established what is called Full Nodes on the blockchain, which are slightly more efficient than using regular client software on the blockchain, and have optimized them for merchant services. Continue reading...

How Will Ethereum Scale?

How Will Ethereum Scale?

With cryptocurrencies, there is always a question of how the blockchain will scale as technology changes and the currency grows in demand. Blockchains are meant to be immutable, meaning that once a change has been made to it, such as the data for a particular transaction, the record of the transaction cannot be changed or forgotten. This means that, for one thing, the distributed ledger that holds the record of all the transactions will inevitably get larger and larger, and any computer that wishes to be a node may have to download a potential cumbersome file with all that data. Continue reading...

What is the Difference Between Public and Permissioned Blockchains?

What is the Difference Between Public and Permissioned Blockchains?

Blockchain technology does not always have to be implemented in a public peer-to-peer system. Blockchains rely on a network of computers, representing nodes, that collaborate and distribute the information required for the blockchain to function. The nodes in some blockchains can be established by any computer willing to run the client software for the network. Bitcoin and most cryptocurrencies are intended to function this way: as a public, open-source, permission-less, and trust less network. The nodes are used indiscriminately by the rest of the network as long as the node is performing the functions required of nodes, and this is called a proof-of-work system.  When Satoshi Nakamoto coded the first blockchain, his intention was to keep the network functioning with only one tier: “one CPU, one vote.”  That vision has encountered obstacles in the form of ASIC mining and other unforeseen circumstances that have empowered some nodes and groups of users over others. Continue reading...

What is an Accelerated Return Note (ARN)?

What is an Accelerated Return Note (ARN)?

An accelerated return note (ARN) is an unsecured debt instrument that uses derivatives to offer leveraged returns and minimal loss exposure to retail investors. Accelerated Return Notes came onto the scene around 2010-2012. They are a form of structured note marketed primarily by Merrill Lynch and Bank of America. They were packaged as offering “accelerated” returns on familiar indexes and stocks. The way such returns are generated is by taking up 2x or 3x positions in calls and futures on the index or stock of choice. Continue reading...

Bitcoin’s Source Code, Pt 1: What Does Open-Source Mean?

Bitcoin’s Source Code, Pt 1: What Does Open-Source Mean?

Many examples of open-source software exist today, including the code for Bitcoin and other cryptocurrencies. “Open-source” describes software or code that is available for anyone to use, modify, study, or share without incurring any cost. In most cases, the open-source software has been created through unrestricted and collaborative community involvement, which is sometimes called “crowd-sourced.” The word “source” in this case refers to the source code that lays the foundation for software programs. In some cases, the same source code can be used as the foundation for many different software applications built on top of it. For example, the Valve Corporation’s game engine code, ironically named Source, has been used to create approximately 50 different games, many of them by independent developers using the open-source code. Continue reading...

What Types of Bonds Are There?

Bonds are divided into a several categories, and it is possible to get substantial diversification within a bond portfolio alone. Bonds may be categorized into several types. There are investment grade bonds which are conservative and safe, high-yield bonds which are relatively risky and profitable, floating rate bonds whose coupon rate is not fixed, zero coupon bonds which only pay at maturity, and foreign bonds, and so on. Continue reading...

What Does Debt Financing Mean?

Debt financing occurs when a company borrows money or secures financing through loans, with the obligation to repay the money (typically with interest). Generally, a corporation will engage in debt financing by selling bonds in the marketplace or to private investors, or with promissory notes or commercial paper. Generally the terms of the bond or the loan will have the company commit as collateral assets of the business, such as real estate, cash on hand, or fixed assets. Continue reading...

What are Hardship Withdrawals from my 401(k)?

The IRS Code allows for certain penalty-free withdrawals, and gives the plan administrator the freedom to define certain other hardship exemptions. Certain kinds of retirement plan withdrawals are excluded from the 10% early withdrawal penalty tax. These include medical expenses which exceed 7.5% or 10% of Adjusted Gross Income, distributions to the family members of active duty military personnel who have been called to active duty, and distributions needed if the participant becomes disabled. Continue reading...

What is a Bond Purchase Agreement?

If a municipality or company decides to issue bonds, they will need to form an alliance with an underwriting entity to help them price and distribute the bonds, and the Purchase Agreement outlines their contract. Underwriters on debt issues are normally large investment banks. They help the issuer, which could be a city government or company, structure the bonds and price them in a way that is suitable to their needs, and also agrees to help them distribute them. Continue reading...

Mode: How is the mode calculated in statistics?

Mode: How is the mode calculated in statistics?

Explore the multifaceted concept of the mode in statistics with our comprehensive guide! Delve into its definition, relevance, and various occurrences, including unimodal, bimodal, and multimodal. Learn how to calculate it manually or through a distribution graph. Suitable for both numerical and categorical data, the mode is a vital tool in data analysis. Continue reading...

What is an A-note?

What is an A-note?

An A-note describes a slice of the top tranche of an asset-backed security. Asset-backed securities are categorized into tranches for quality, and an A-note is a share of the best available tranche. Asset-backed securities include Collateralized Mortgage Obligations (see — CDOs), Mortgage-Backed Securities, Credit Card Debt, and other kinds of cash flows, especially related to debt instruments that have been pooled and sold to investors. This shifts the risk from the lending institution to the underwriters and investors in the asset-backed security. Continue reading...

What is a Treasury Note?

Treasury notes are government-issued coupon bonds with maturities between 1 and 10 years. A large secondary market exists for Treasury Notes, and they can be acquired at issue in a competitive bid or a noncompetitive bid auction. They are extremely popular for their marketability and six-month interest payment schedule. They do have interest rate risk, since treasuries issued with higher interest rates will make the ones already issued with lower rates less valuable. Continue reading...

What Is a Promissory Note?

What Is a Promissory Note?

A promissory note is a financial instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on demand or at a specified future date. In this article, we'll delve into what a promissory note is, how it works, its types, and the advantages and disadvantages of using one. Promissory notes can be thought of as a financial intermediary between the informality of an IOU (I Owe You) and the strict structure of a loan contract. An IOU simply acknowledges a debt, while a promissory note includes a promise to pay on demand or at a set date, along with details on the repayment process. Continue reading...

How Does Blockchain Technology Work?

How Does Blockchain Technology Work?

Blockchains are intended to maintain integrity in the system without anyone needing to monitor or control it. By instituting a system of checks and balances that functions on its own accord through rules programmed into the protocol, and which also makes decisions and keeps records based on consensus throughout a peer-to-peer network, a blockchain oversees its own activities without requiring any trust in a central authority or the other parties involved. Continue reading...

How does Bitcoin Mining Work?

How does Bitcoin Mining Work?

Anyone with a computer connected to the internet can potentially be a bitcoin miner. Bitcoin’s blockchain technology requires that a large network of computers, running the same client software, be used to randomly succeed at validating blocks of encrypted transactions every 10 minutes or so. That’s where bitcoin mining comes in. Mining is the act of letting one’s computer run what’s known as the “hash function” over and over and over in an attempt to crack the codes on the blocks that need validation. The codes that need cracking are all similar and are only difficult enough to require an average of 10 minutes for a random mining computer to get the right answer. The code and the answers are only significant in that they take time to complete, and that they allow the transactions to be validated and added to the ledger of all bitcoin transactions. Continue reading...

What is a Distributed Ledger?

What is a Distributed Ledger?

A distributed ledger is a records system in which the same information is held redundantly across many nodes in a network, and is essential to blockchain technology. Centralized databases used to be the primary way that important records of transaction histories and so forth were held.  Databases validate the identity of those requesting access to the records by asking for and retaining personally identifying information. If that office building were to lose power, was hacked, or was destroyed, it is possible for all of the information to be lost or given over to hands of bad actors. Even with cloud storage backups, the security and financial risk to any one of these storage depositories remain a problem. Continue reading...

How do Bitcoin Transactions Work?

How do Bitcoin Transactions Work?

Two words: blockchain technology. Transactions in bitcoin are encoded, packed into a block of other transactions, and all of these are sent out to thousands of computers running blockchain computations, known as hashes. All of these computers are running similar algorithms designed to force honest work and to take time for the computers to complete. The purpose of this step is merely forcing the blockchain to require time, energy, and effort, and to be randomized and decentralized when it is validating transactions. Whichever computer solves it first receives an incentive reward, and the entire blockchain, comprised of all computers running bitcoin client software, then updates the ledger to include the most recent validated transactions. Continue reading...

How is Ripple Different Than Bitcoin and Ethereum?

How is Ripple Different Than Bitcoin and Ethereum?

Ripple’s XRP has the third-largest market cap in the cryptocurrency world, but what gives it value? Ripple Lab’s intent was not to be a store of value or a currency, per se, like Bitcoin. Neither did it intend to be a platform for developers to explore the possibilities of blockchains, like Ethereum. Ripple was always focused on being a payment system, facilitating transfers between banks, currencies, and countries in a way that would not be possible without blockchains. Continue reading...

What is Ethereum?

What is Ethereum?

Ethereum is an open-source, public, blockchain-based distributed computing platform. Ethereum provides a cryptocurrency known as ether. Ethereum is a decentralized platform that runs what are known as “smart contracts.” Smart contracts are applications that run on custom built blockchain, which functions on its own accord through rules programmed into the protocol, and which also makes decisions and keeps records based on consensus throughout a peer-to-peer network. A blockchain oversees its own activities without requiring any trust in a central authority or the other parties involved. Continue reading...