vania-janet/multiturn-rag-retrieval-data huggingface dataset:
If this is the initial transaction, the rules of a short margin account say that if you shorted 1000 share of ABC at $5/share your credit balance would be $5000 from the short plus you would have to put up yourself $5000 cash or $10,000 of marginal securities. So this is not really leveraging using margin. You have to put in just as much as the short generates. Is that what this relates to? Once the initial purchase has been made the minimum maintenance for a stock trading under $5 per share is 100% of the short market value in the margin account or $2.50 per share whichever is greater. For stock trading at $5/share or greater the minimum maintenance requirement is $5/share or 30% of the short market value, whichever is greater. The minimum maintenance requirements can be tighter.
Is the following correct?  The firm needs $20,000 for the investment. It borrows $6,000 @ 7%, and supplies $14,000 in equity.  The interest expense on the borrowing is $420 ($6,000 times 7%).  After one year, the firm receives $26,500 from its investment. Subtract $6,420 (return borrowings plus interest). The firm is left with $20,080. Divide by starting equity of $14,000. Subtract 1 from the ratio.  **Levered return on equity is 43.4%.**
A minimum purchase quantity just means that you need to round your result up to the nearest 100. In your example it comes out evenly. If we look at an example where it doesn't come out even, you'd round up: And round that up to 700 due to purchase quantities. For a slightly more complex and accurate approach, you'd then evaluate how many of the extras you had to buy due to the minimum purchase quantity would need to be sold: So you'd have to sell 694 of the 700 purchased to break even.
I found that the Target Date funds for Vanguard have a lower minimum, only $1,000. They are spaced every 5 years from 2010 to 2060. They are available as: General Account, IRA, UGMA/UTMA and Education Saving Account.
""Settlement"" is immediate upon closing out any position that you may have put on...No waiting for clearing before your next trade. If you want to hold an e-mini contract position over 2 or more sessions, you need to have about $5000 per contract in your account to cover the minimum margin requirement that comes into play during the transition between sessions... With the e-minis you are speculating on gaining from the difference between when you 'put-on' and ""close-out"" a position in order to profit. For example, if you think the DJIA is about to rise 20 points, you can buy 1 contract. If you were correct in your assessment and sold your contract after the e-mini rose 20 points, you profited $100. (For the DJIA e-mini, each 1 point 'tick' is valued at $5.00)"
The question lacks specificity, i.e. when does the initial investment occur, now or one period from now?  If now then it is a perpetuity due.   I  will consider under 2 scenarios, A and B, relating to the size of the initial investment. A. Assuming that the initial investment (C_0) occurs now and each payment thereafter has the relationship (1+g) with this investment then the relevant base equation is that for the present value of a growing perpetuity due, expressed in terms of C_0, i.e.  PVGPD=  [C_0*(1+g)*(1+i)]/(i-g). Now, to suit the question asked, we can see that i=fixed rate of return (f) and g = expected inflation rate (e) such that we can rewrite the equation as PVGPD = [C_0*(1+e)*(1+i)]/(i-e].   We know that f = is a fixed nominal rate and must be adjusted for e to calculate the real rate (r) according to the equation f=(1+r)*(1+e)-1. Therefore  PVGPD = [C_0*(1+e)(1+(1+r)(1+e)-1)]/((1+r)*(1+e)-1-e] Tidying up  PVGPD = {C_0*(1+r)(1+e)^2}/[r(1+e)] PVGPD = [C_0*(1+r)*(1+e)]/r B. Assuming that the initial investment (X) is not equal to each subsequent perpetual payment (C_1) then the relevant base equation is that for the the initial investment plus the present value of a growing perpetuity, i.e.  PVGP=  X + [C_1/(i-g)] Rewriting  PVGP = X + [C_1/(f-e)]    Substituting PVGPD = X + {C_1/[(1+r)*(1+e)-1-e]} Tidying up  PVGPD = X + C_1/[r*(1+e)]
"Simplest way to answer this is that on margin, one is using borrowed assets and thus there are strings that come with doing that. Thus, if the amount of equity left gets too low, the broker has a legal obligation to close the position which can be selling purchased shares or buying back borrowed shares depending on if this is a long or short position respectively. Investopedia has an example that they walk through as the call is where you are asked to either put in more money to the account or the position may be closed because the broker wants their money back. What is Maintenance Margin? A maintenance margin is the required amount of securities an investor must hold in his account if he either purchases shares on margin, or if he sells shares short. If an investor's margin balance falls below the set maintenance margin, the investor would then need to contribute additional funds to the account or liquidate stocks in the account to bring the account back to the initial margin requirement. This request is known as a margin call. As discussed previously, the Federal Reserve Board sets the initial margin requirement (currently at 50%). The Federal Reserve Board also sets the maintenance margin. The maintenance margin, the amount of equity an investor needs to hold in his account if he buys stock on margin or sells shares short, is 25%. Keep in mind, however, that this 25% level is the minimum level set, brokerage firms can increase, but not decrease this level as they desire. Example: Determining when a margin call would occur. Assume that an investor had purchased 500 shares of Newco's stock. The shares were trading at $50 when the transaction was executed. The initial margin requirement on the account was 70% and the maintenance margin is 30%. Assume no transaction costs. Determine the price at which the investor will receive a margin call. Answer: Calculate the price as follows: $50 (1- 0.70) = $21.43 1 - 0.30 A margin call would be received when the price of Newco's stock fell below $21.43 per share. At that time, the investor would either need to deposit additional funds or liquidate shares to satisfy the initial margin requirement.
"Admiral Share class comes with a low expense but higher minimum investment amount. Think of it as a wholesale deal. From Vanguard's website - Admiral™ Shares are a separate share class of Vanguard mutual funds that were created to pass along the savings that result from larger accounts to the investors who own them. Regarding the minimum investment amount, if you look at other prime money market fund and the corresponding ""wholesale"" version (different institutions use different names: Admiral Shares, Capital Class, Institutional Class etc.), you will see some with even bigger differences. For example, FIPXX requires $10mil."
Now, in a year, a new investor comes in, and another 3.02M stocks are issued (if, for example, the new investor wants a 50% stake). In this case, there will be 6.04M stocks issued, for 302M value - each stock is worth $50 now. That is called dilution. Your grant is in nominal options, so in case of dilution, the value of your options will go down. Additional points: If the company is not yet public, selling the stocks may be difficult, and you may own pieces of paper that no-one else wants to buy. You will still pay taxes based on the valuations and you may end up paying for these pieces of paper out of your own pocket. In California, it is illegal to not pay salary to regular employees. Unless you're a senior executive of the company (which I doubt), you should be paid at least $9/hour per the CA minimum wages law."
The card-holder agreement does not explicitly specify a minimum spending requirement. It does though, have the following catch-all clause for closing the account: We may:   • cancel your Account,   • suspend the ability to make charges,   • cancel or suspend any feature on your Account, and   • notify merchants that your Account has been   cancelled or suspended.   If we do any of these, you must still pay us for all   charges under the terms of this Agreement. We may do any of these things at our discretion, even if you pay on   time and your Account is not in default. If your Account is cancelled,   you must destroy your cards. We may agree to reinstate your Account   after a cancellation. If we do this, we may: • reinstate any   additional cards issued on your Account, • charge you any applicable   annual fees, and • charge you a fee for reinstating the Account. One would suspect that American Express would happily collect the fee from anyone who holds the card, but is not using it (in any way). Someone, though, that isn't spending the expected amount of money, but is availing themselves of the 24 hour concierge service, etc., would probably find their privileges revoked and/or their card canceled.
If you are trying to invest in closely held / private companies (things that don't trade on the stock market), you will run into a variety of regulatory problems. For various reasons, most private companies only raise funds with accredited investors. To be an accredited investor you basically have to have $1,000,000 in net worth - NOT including your primary residence, OR you have to make over $200,000 a year for the last two years and expect to keep making that much. This is a class distinction the Federal government created, you will see different but similar wealth and investment classes worldwide. So your best most organized opportunities are left out, unless you do qualify as an accredited investor. There are tons of other companies, things you will find locally, that will let you invest in their smaller time operations. (Think like a local yoga studio looking for $20,000 and willing to split the profits with you). But the problem here is lack of accountability, where partners skip town or just stop answering your calls, and the legal remedies cost you more than your claim. That being said there are people that provide capital to smaller publicly traded companies on the bulletin boards and pink sheets. They have opportunities do much better than the actual stock market investors in these companies, because you can negotiate contracts that let you cash out in their inevitable financing death spirals with very little risk to you. You can do these things as an individual or as a holding company, but the holding company will limit your liability to the amount your holding company invested, instead of your personal assets, in case your financing starts to incur liability with the company.
Got some questions related to banks and cash, specifically required reserve ratio and capital requirements.  The way i understand it is, a bank is required to hold a percentage of money it has loaned to other people (required reserve ratio).  Example: If the rrr is 10%; i give the bank 100k, because it is only required to hold 10% (10k) it loans 90k to my neighbour, neighbour buys a car from the dealership, the dealership banks the 90k.  now the bank can loan 81k of the dealerships 90k. The bank loans to businessman who buys land worth 81k, land owner banks the 81k.  So the bank received 100k from me to hold and protect, loaned 90k to bob,recieved 90k from dealership,loaned 81k to businessman, recieved 81k from land owner.  100k+90k+81k = 271k bank over time will receive another 90k from bob, and 81k from business man + interest. This all assumes there is 1 bank, and all these people put there money in the bank not keeping cash.  In my native country we have no required reserve ratio, we have a capital requirement. On our central bank website it states a total capital ratio of 8%.  A capital ratio is equity + (profit-money given to shareholders) / risk weighted assets.  Question, how do you determine equity, profit, and risk weighted assets for a bank?  is equity the cash the bank has, profit the money from fees+interest, and risk weighted assets how much money the bank has in loans?
Let P denote the amount of the investment, R the rate of return and I the rate of inflation. For simplicity, assume that the payment p is made annually right after the return has been earned. Thus, at the end if the year, the investment P has increased to P*(1+R) and p is returned as the annuity payment. If I = 0, the entire return can be paid out as the payment, and thus p = P*R. That is, at the end of the year, when the dust settles after the return P*R has been collected and paid out as the annuity payment, P is again available at the beginning of the next year to earn return at rate R. We have P*(1+R) - p = P If I > 0, then at the end of the year, after the dust settles, we cannot afford to have only P available as the investment for next year. Next year's payment must be p*(1+I) and so we need a larger investment since the rate of return is fixed. How much larger? Well, if the investment at the beginning of next year is P*(1+I), it will earn exactly enough additional money to pay out the increased payment for next year, and have enough left over to help towards future increases in payments. (Note that we are assuming that R > I. If R < I, a perpetuity cannot be created.) Thus, suppose that we choose p such that P*(1+R) - p = P*(1+I) Multiplying this equation by (1+I), we have [P(1+I)]*(1+R) - [p*(1+I)] = P*(1+I)^2 In words, at the start of next year, the investment is P*(1+I) and the return less the increased payout of p*(1+I) leaves an investment of P*(1+I)^2 for the following year. Each year, the payment and the amount to be invested for the following year increase by a factor of (1+I).
First, welcome to Money.SE. If you are interested in saving and investing, this is a great site to visit. Please take the tour and just start to read the questions you find interesting.  1 - even though this is hypothetical, it scales down to an average investor. If I own 1000 shares of the 1 billion, am I liable if the company goes under? No. Stocks don't work that way. If all I have is shares, not a short position, not options, I can only see my investment go to zero.  2 - Here, I'd ask that you edit your country in the tags. I can tell you that my newborn (who is soon turning 17) had a stock account in her name when she was a few months old. It's still a custodian account, meaning an adult has to manage it, and depending on the state within the US, the age that it's hers with no adult, is either 18 or 21. Your country may have similar regional rules.  Also - each country has accounts specifically geared toward retirement, with different favorable rules regarding taxation. In the US, we have accounts that can be funded at any age, so long as there's earned income. My daughter started one of these accounts when she started baby sitting at age 12. She will have more in her account by the time she graduates college than the average retiree does. It's good for her, and awful for the general population that this is the case.
Most brokers have a margin maintenance requirement of 30%.  In your example, it would depend on how much money you're borrowing from your broker on margin. Consider this: You have $250, and short AAPL at $500 on margin. This would be a common scenario (federal law requires investors to have at least 50% of their margin equity when opening a transaction). If your broker had a requirement of 30%, they would require that for your $500 position, you have at least $500 * .3 = $150 equity. Since you are currently above that number at $250, you will not be hit with a margin call. Say the price of AAPL doubles, and now your position is worth $1000. $1000 * .3 = $300, which is $50 above your initial equity. Your broker will now consider you eligible for a margin call. Most will not execute the call right away, you will often have some time to either sell/cover stock or add funds to your account. But not all brokers will warn you if you are breaking margin requirements, and sometimes margin calls can take you by surprise if you are not paying attention. Also, many will charge interest on extra margin borrowed.
"I take it you have nearly zero expenses, since you don't mention any savings and with your income you wouldn't have much left over for investing. At your level of income, any actual investing is either going to unwisely reduce your cash available should you need it (such as investment in mutual funds, which often have minimum investment periods of 2-6 months or more to avoid fees), or cost you a high percentage of your income in commissions (stock trading). So, I wouldn't recommend investing at all — yet. I find Dave Ramsey's baby steps to be very good general money management advice.  Here is how I would adapt the first three steps to your income and stage in life. Beyond this, Dave recommends saving for retirement, college (for kids) and paying off your house early.  These things are a little beyond your stage in life, but it would be good to start thinking about them. For you, I recommend following DJClayworth's advice to ""invest in yourself"".  Specifically, plan to get through college debt-free.  Put away money so that you have a head start once you do have living expenses — save for a car, save money for rent, etc. so that you don't have to live month to month as most people do starting out. So, what this boils down to: Put away every cent you have, in a savings account."
So, if it was a personal account, and not an investment in Refco, you should have been insured by the SIPC for $500,000 for your securities, and $100,000 or more for cash.    If you had all your money invested in Refco, you weren't diversified, which is one of the first rules of investment.  It's not fun to learn this the hard way, I know from experience, but you should never invest more in any one stock than you can afford to lose.  Learn from your mistakes rather than blame the big guys vs little guys.
"Nobody has mentioned your ""risk tolerance"" and  ""investment horizon"" for this money. Any answer should take into account whether you can afford to lose it all, and how soon you'll need your investment to be both liquid and above water. You can't make any investment decision at all and might as well leave it in a deposit-insured, zero-return account until you inderstand those two terms and have answers for your own situation."
"The definition I use for financial independence is 99% confidence that, at a specific estimated spending rate per year (allowing for estimated inflation, and budgeting for likely medical emergencies, and taxes on taxable investments), the money will outlast me. This translates to needing an average annual return on investment which covers the average yearly spending. For my purposes, that works out to my relying on being able to draw only a 4% income from the money each year, which should give me good odds of the money not just being sufficient but being able to deliver that rate ""forever"". (Historically, average US stock market rate if return is around 8%.) That is overkill, if course, I could plan on the money just barely lasting past my 120th birthday or something of that sort, but the goal us to be pretty sure not only that I won't run out but that I will have some cash unexpected needs. Which in turn means that I estimate I need investments 1/.04 times the yearly spending estimate to declare the ""forever"" independence/retirement, or 25x the yearly. From that, I can calculate how much longer, at a given savings rate and rate of return, it'll take for me to reach that target.  Obviously you need to adjust all these numbers to reflect your opinions/understanding if the market, your own needs, your priorities and expected maximum age, and the phase of Saturn's moons. But that's the basic rationale. Or you can pay a financial planner to give you this number, and a strategy for getting there, based on the numbers you give him or her plus some statistical analysis of the market's overall history."
That is definitely where my intuition went as well. I know we wouldn't meet certain requirements. I expect to have to jump through hoops to make it happen. I was mostly asking what hoops I will jump through, and if we will have to jump through fewer if we are not planning on handling other people's cash.
"Do you need the capital? If you not, are you considering taking it to help you grow faster? To lower your downside risk?   In terms of deal structure start with your financial model  and evaluate  your payback period and IRR... Think if you were investor how much of a split would you need to compensate the risk you are taking.  Generally the investor will want to get 100% of their original investment paid back plus a annual  8%  ""preferred"", return and after they are made whole 80% of proceeds, but I've seen restaurant deals at 50/50 splits and no preferred return.   I'd try to ensure you get a salary and/or management fee.   Make sure you retain control and rights!  Don't sign anything without legal review."
"i realize the required rate will need to be below the expected growth rate. not really the issue.   i'm also not looking for insight into how i model these two possible options, i'm really just interested in how people would think about producing a discount rate for the projects.  ""but you determine the required return(discount rate) based on the perceived risk of the investment and your particular views""   this was the ultimate question i was getting at. what would YOU use?"
Consider a single person with a net worth of N where N is between one and ten million dollars.  has no source of income other than his investments How much dividends and interest do your investments return every year?  At 5%, a US$10M investment returns $500K/annum.  Assuming you have no tax shelters, you'd pay about $50% (fed and state) income tax. https://budgeting.thenest.com/much-income-should-spent-mortgage-10138.html A prudent income multiplier for home ownership is 3x gross income.  Thus, you should be able to comfortably afford a $1.5M house. Of course, huge CC debt load, ginormous property taxes and the (full) 5 car garage needed to maintain your status with the Joneses will rapidly eat into that $500K.
"Good question! It seems to me that there is no minimum order size for shares trading on the LSE. Please note, I couldn't find an definite answer, but: According to the ""International Order Book"" document (see: http://www.londonstockexchange.com/traders-and-brokers/rules-regulations/change-and-updates/stock-exchange-notices/2010/n2210_attach1.pdf) from the LSE (page 7): Question 7: Would respondents support a revision of the minimum order size of 50 units? Whilst there was limited support for a low value based minimum order size the majority of respondents requested its complete removal. This was incorporated into the September 2010 quarterly review as per Service Announcement 001/100910 and as from 20 September 2010, the minimum order size in all IOB securities has been 1 unit Even though not all trading on the LSE is performed on this IOB system, it would be very wierd if the international stocks can be traded in any size, while domestic stocks will have an minimum size. Further, consider looking to the times and sales of various stocks (here you can find an example http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/exchange-insight/trade-data.html?page=0&fourWayKey=GB0006731235GBGBXSET1&formName=frmRow&upToRow=-1). Those trades also suggest that there is no minimum order size (for example, I just saw an executed trade with an size of 13). At last, look at the Interactive Brokers (no relationship with) Exchange List at http://www.interactivebrokers.com/en/trading/exchanges.php?exch=lse&showcategories=&ib_entity=llc. Here you can click on various stock names, and in the popup window that opens, look for 'size parameters' and the size increment. I could only find stocks with an size increment of 1 (i.e. you can trade anything with a minimum of 1 stock, and more needs to be in steps of 1 stock).