6) The Federal Reserve: Conclusion
They say that “money makes the world go round,” and couldn’t this be more true now that you’ve learned a lot about the Federal Reserve? The power and influence that the Fed holds over...
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5) The Federal Reserve: The FOMC Rate Meeting
FOMC Decisions The Federal Open Market Committee (FOMC) decides whether to raise, lower or maintain its objective for the federal funds rate (FFR), as well as to determine the discount rate. As mentioned in...
4) The Federal Reserve: Monetary Policy
What happens when interest rates are reduced? While many debtors will most likely rejoice at this welcome news, the fact is that it will have an adverse affect on the economy. If more people...
3) The Federal Reserve: Duties
The Federal Reserve’s task is written in its mandate: “To promote sustainable growth, high levels of employment, stability of prices, to help preserve the purchasing power of the dollar and moderate long-term interest rates.”...
2) The Federal Reserve: What Is The Fed?
Originally, the US was not regulated by any organization for studying and implementing economic and monetary policy. Financial institutions were free to do whatever they wanted without real government intervention. As a consequence, markets...
10) Financial Concepts: Conclusion
Now let us review the key points of this tutorial: The risk/return tradeoff is achieving a balance between the desire for the lowest possible risk and the highest possible return. The higher the risk,...
09) Financial Concepts: Capital Asset Pricing Model (CAPM)
Capital Asset Pricing Model was developed originally by Harry Markowitz in 1952. It was modified a decade later by others. The CAPM is the relationship between change and expected return and serves as the...
08) Financial Concepts: The Optimal Portfolio
This concept is under the modern portfolio theory which assumes that investors would always try to reduce risk while waiting to strike the highest return possible. The theory states that investors behave rationally, in...
07) Financial Concepts: Efficient Market Hypothesis
Eugene Fama is best known for her role in the development of the Efficient Market Hypothesis (EMH) in the 1960s. This hypothesis states that because prices already incorporate and reflect all relevant data, it...
06) Financial Concepts: Random Walk Theory
This theory became highly popular because of a book – A Random Walk Down Wall Street, written by Burton Malkiel in 1973. This book is now regarded as an investment classic. The random walk...
05) Financial Concepts: Asset Allocation
An investor planning long-term investments should have a portfolio comprised chiefly of stocks, since it is no secret that common stocks lead most other financial instruments in performance. Investors who do not wish to...
04) Financial Concepts: Dollar Cost Averaging
Any professional investor will likely say that picking peaks and lows in the market is the most difficult call they have to make. Trying to time the market is a strategy that is extremely...
03) Financial Concepts: Diversification
A lot of individual investors cannot tolerate short-term fluctuations. In order to smooth out the ride, you should diversify your portfolio Diversification is a risk-management technique that mixes a wide array of investments within...
02) Financial Concepts: The Risk/Return Tradeoff
The risk/return tradeoff is often called the “ability-to-sleep-at-night” test. Some people can afford to financially skydive without even blinking an eye, but most cannot do so without a security harness. It is important to...
8) Futures Fundamentals: Conclusion
Trading in the futures market is risky. It can be especially complicated for those who are still new to investing. While it is not for everybody, the futures market can be suitable for a...