Underpayment Penalty A tax penalty enacted on an individual for not paying enough of his or her total estimated tax and withholding. It is a penalty assessed by tax authorities when a taxpayer's withholding and estimated tax payments (plus any overpayment from the prior year) are substantially less than the tax that is owed. The IRS does not assess an underpayment penalty … [Read more...]
Long Inverse Floating Exempt Receipt – LIFER
A floating rate debt security traded among qualified institutional buyers (QIBs) and originated by German financial firm Deutsche Bank. The receipts pay a yield equal to a fixed base interest rate minus the floating rate of a benchmark (such as LIBOR+). As such, the interest rate paid moves inversely to the direction of the variable rate itself. LIFERs fall under municipal … [Read more...]
What do you mean by Tax Shield?
A reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization and depreciation. These deductions reduce taxpayers' taxable income for a given year or defer income taxes into future years.A tax shield is the reduction in income taxes that results from … [Read more...]
Choosing a Data-Based Intraday Charts
Traders always have this habit of seeing intraday price charts continuosly while trading in market hours especially based on time intervals, such as five-minute or 60-minute charts. This means that one bar will print at the end of each specified time interval. On a 60-minute chart, for example, a bar will print at 9:30, 10:30, 11:30 and so on until the end of the trading … [Read more...]
Efficient Market Hypothesis: Introduction
EMH i.e Efficient Market Hypothesis is an investment theory that states that it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase … [Read more...]