Additional Funds Needed (AFN) is used to determine the amount of funding required for a business to expand its operations while maintaining the integrity of the core operation. Various factors are considered to determine the amount of additional funding needed, and calculating it properly helps identify when the expansion will generate its own benefits. Factors […]
Approved funds are cash, checks, or financial instruments deposited in a bank or investment account, authorized for use by the institution. Deposits may be immediately available or held for a specified time. Banks have policies on cleared funds, and delays can be avoided with electronic transfers. Approved funds are generally identified as cash, checks, or […]
Corporate bond funds hold various debt or bond instruments, with different levels of risk and rewards. Domestic funds contain investment grade debt, while junk funds contain low-rated bonds. Global funds offer diversity, while international funds focus on foreign bonds with higher interest rates. Corporate bond funds are mutual funds that hold a variety of debt […]
Matching funds are contributions that match those from another sponsor or donor, commonly used in federal elections and charitable groups. They can attract more donors and are often limited to a maximum amount to prevent donors from withdrawing. Matching funds are also used by organizations such as the National Endowment for the Humanities and in […]
Open-ended funds, also known as mutual or bond funds, allow investors to buy shares directly from the fund manager with no limit on the number of shares sold. The fund manager buys back shares from investors who want to sell. The share price is called the net asset value (NAV) and is determined once a […]
Diversifying funds means dividing investments into different groups to share risk and rewards. It reduces the risk of losing all investments in one area and typically results in lower but more predictable returns. Financial advisors recommend higher risk for younger investors and lower risk for older investors. Stocks are the riskiest but offer the highest […]
Exchange funds allow investors to exchange individual shares for units in the fund, increasing diversification and deferring capital gains tax. They are not exchange-traded funds and are exclusive to the US, with private and public options available. Shares in the fund cannot be sold for at least seven years to minimize tax liability. Exchange funds […]
Emerging market funds invest in developing countries with high growth potential, but are considered high-risk due to economic and political uncertainty. Investment can be made through mutual funds, ETFs, or US Depository Receipts. An emerging market fund refers to an investment or investment fund that places the majority of its investments in the financial markets […]
Restricted funds are assets or income set aside for a specific purpose and cannot be used for any other project. Donors create funds to launch projects, and scholarships, charities, and non-profits benefit from them. Restricted funds allow donors to support something of personal importance and can finance various projects. Restricted funds are any type of […]
Quant funds use computer models to make investment decisions, removing emotional bias. However, the accuracy of the models relies on the quality of the data entered. Some funds use a hybrid approach, combining computer-generated recommendations with human expertise. Also known as quant funds, quant funds are investment or mutual funds that use the quant analysis […]
Ginnie Mae funds allow investors to participate in government-owned agency bonds for mortgage-backed securities. They are popular in collective or institutional investment schemes and are part of the bond market. Ginnie Mae is a mortgage debt broker and pays off balances if a homeowner defaults on a mortgage. It is government-owned and operated, unlike Fannie […]
Same-day funds are money available for use immediately upon deposit, often through wire transfers. Federal funds and CHIPS are common types, with CHIPS processing payments on a daily netting basis. Real-time wire transfers between account holders are also available, while next day funds are not available until the following business day. In finance, same-day funds […]
High-income funds provide a constant source of income, but choosing the right one is important. They require a minimum investment commitment, and fees and costs should be considered. Finding the right provider may take time, but it’s important to minimize risk and maximize profits. High-income funds are funds that are structured to provide a constant […]
Small-cap mutual funds offer diversification and professional management for individual investors. Research online and prospectuses can help choose the best funds, considering risk and fees. Small-cap stocks have potential for growth and profits, but can be risky. For the individual investor, mutual funds are often considered the most convenient way to invest and receive the […]
Choosing REITs or REIT mutual funds involves evaluating investment objectives, financial picture, diversity, and past performance. REIT mutual funds offer small investments and diversification, protecting against losses in one sector. The real estate market and past performance affect performance. Past performance is a good predictor of future performance. Choosing real estate investment trusts (REITs) or […]
Clearing house funds are transmitted through the Federal Reserve System via personal or commercial checks. The central processing mechanism records the receipt of the check, makes a tentative demand on the customer’s account, and holds the funds until the check clears. The processing time varies based on the number of banks involved. Orders may be […]
A proof of funds is a document from a financial institution confirming an individual or entity has the funds to carry out a financial transaction. It is not a guarantee and can be used by scammers. Banks discourage issuing it unless the entity requesting it is legitimate. A proof of funds is a document prepared […]
Retirement income funds (RIFs) are a type of managed retirement savings account that typically consist of bonds, mid-caps, and large-caps. They provide moderate capital gains and investment income, but are subject to market volatility and provide no collateral. RIFs require a minimum deposit and charge fees, and are essentially another type of managed mutual fund. […]
Public libraries provide free resources for research, literacy education, and events. Funding comes from national, state, and local sources, grants, and private donations. Budget cuts threaten library survival, making community support important through volunteering or donating. Public libraries are an excellent resource for research, literacy education, and reading-oriented events. Most cities have one or share […]
COFI is a ratio used by lenders and banks to calculate interest rates, based on interest expenses reported by financial institutions. It is used as the basis for interest rates on adjustable-rate mortgages and savings accounts, with a margin added to determine the rate. The cost of funds index (COFI) is one of the ratios […]
