What do the bid and ask prices represent on a stock quote?

July 7, 2024 No Comments

A: The bid and ask prices are stock market terms representing the supply and demand for a stock. The bid price represents the highest price an investor is willing to pay for a share. The ask price represents the lowest price at which a shareholder

What does “after the bell” mean?

July 7, 2024 No Comments

A: “ After the bell” is financial slang for activity occurring after the close of the stock market, including after-hours trading, illegal late trading of open-ended funds (during the mutual fund scandal of 2003), earnings announcements, acquisition plans and merger agreements. The term originates from

What does marginal utility tell us about consumer choice?

July 7, 2024 No Comments

A: In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction a consumer gets. Marginal utility tells how much marginal value or satisfaction a consumer gets from consuming an additional unit of good. Microeconomic theory

What does the Fisher Effect say about nominal interest rates?

July 7, 2024 No Comments

A: The Fisher effect is a theory first proposed by Irving Fisher. It states that real interest rates are independent of changes in the monetary base. Fisher basically argued that the real interest rate is equal to the nominal interest rate minus the inflation rate.

What economic factors affect savings account rates?

July 7, 2024 No Comments

A: At a basic economic level, the interest rate set on savings account deposits is determined by the relationship between how much banks value receiving extra deposits and how much savers value the services of a savings account. Those valuations are manipulated by how governments

What causes a significant move in the stock market?

July 7, 2024 No Comments

A: There is a nearly infinite number of factors that can cause the stock market to move significantly in one direction or another, including economic data, geopolitical events and market sentiment. There is a constant in each of these situations, however. In any stock market move,

What economic indicators are important for investing in the financial services sector?

July 7, 2024 No Comments

A: The financial services sector is integral to the overall level of economic activity in the United States and globally. For this reason, most of the major macroeconomic indicators are very important for the sector. Financial services companies rely on high levels of activity to

What causes inflation, and does anyone gain from it?

July 7, 2024 No Comments

A: Inflation affects everything around us, from basic necessities like housing, food, medical care and utilities to the cost of cosmetics and new automobiles. Furthermore, inflation can effortlessly deteriorate our savings. It makes the money saved today less valuable tomorrow, eroding our future purchasing power

What causes negative inflation or deflation?

July 7, 2024 No Comments

A: Deflation, or negative inflation, happens when prices fall because the supply of goods is higher than the demand for those goods. This is usually because of a reduction in money, credit or consumer spending. This can be caused by a combination of different factors, including having a

What exactly is being done when shares are bought and sold?

July 7, 2024 No Comments

A: Most stocks are traded on physical or virtual exchanges. The New York Stock Exchange (NYSE), for example, is a physical exchange where some trades are placed manually on a trading floor (other trading activity is conducted electronically). NASDAQ, on the other hand, is a

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