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What is Systematic Risk?
Systematic risk is the broad risk of fluctuations and downturns in the market as a whole, which it is said cannot be eliminated through diversification.
Systematic risk is also known as market risk, which is the exposure of all investors to the broad movements and downturns of the market as a whole. Theoretically it cannot be controlled for through simple diversification, since that would only bring a portfolio closer to the broad market performance, with a Beta closer to 1.
Individual securities or a smaller portfolio with a Beta other than 1 will experience what’s known as idiosyncratic risk, which is the risk of random movement outside of market movements.
Hedging is the practice of attempting to eliminate even systematic risk through positions in derivatives and alternative assets which may behave in a contrarian fashion to the rest of the market or portfolio.
What is the “Life with Period Certain” Option?
In a life with period certain annuity payout option, the company will pay a set income for as long as the annuitant lives
Can I Rollover My Old 401(k) into a New 401(k)?
If your new employer has a 401(k) plan, you can usually rollover your old 401(k) into a new one
Can I Decide How My Money is Invested in My Defined Benefit Plan?
Employees have no control over the assets in their Defined Benefit plan. The short and simple answer is: No
What is Risk?
Risk can be defined as exposure to the possibility of loss of an asset. Risk might be used to denote the potential of loss
What is the Federal Funds Rate?
The federal funds rate is the overnight rate at which commercial lenders lend excess reserves to other institutions
What is Stagflation?
Stagflation is the occurrence of both stagnation, which is slowing growth and production levels, and inflation
What is the Accounting Cycle?
The Accounting Cycle includes all collected documents and all controls and systems in place to ensure accurate accounting
What is Cash Flow from Investing Activities?
Gains/losses from investment activities are recorded in a portion of the Cash Flow Statement called Investing Activities
What is Dividend Enhanced Convertible Stock (DECS)?
DECS - This is a type of automatically convertible security that comes in the form of preferred stock shares, which...
What is the SEC?
The Securities and Exchange Commission (SEC) is a govt. agency which polices the practices of the securities industry