An interest rate cap is a derivative instrument that involves an agreement between two parties. In this agreement, one party assumes the responsibility to pay the other if the interest rate on a variable loan exceeds an agreed limit. The initial contract between both parties sets the timeframe, interest rate limit, and other aspects of the interest rate cap. An interest rate cap is highly advantageous to avoid the risk of interest rates increasing. This derivative can benefit borrowers who want to hedge against a variable-interest loan. However, it comes with a disadvantage to the other party who assumes the responsibility of compensating the borrower. Therefore, this party may include additional charges to the agreement. What is an Interest Rate Cap Premium?Interest rate cap premium refers to the price charged on an interest rate cap by the seller. It comes from the party that assumes the responsibility to compensate the other if interest rates increase. For the buyer, it is the price they pay to purchase the interest rate cap. Usually, interest rate cap premiums come from brokers or counterparties who offer them to interest rate cap buyers. Interest rate cap premiums represent an income from the seller. Usually, it is a percentage of the notional principal amount of a contract. This value is often used to calculate swap payments. For the buyer, the interest rate cap premium represents an expense against hedging the underlying instrument with the variable interest rate. This premium is a part of the agreement between both parties. How does Interest Rate Cap Premium work?An interest rate cap premium is a part of an interest rate cap agreement between two parties. As stated above, in this agreement, one party assumes the responsibility for compensating the other if interest rates fluctuate. In exchange, this party requires compensation for the risks they undertake. This compensation comes from the price paid by the buyer to acquire the interest rate cap. Several factors may contribute to the interest rate cap premium charged on a contract. Usually, these include the duration of the agreement, market volatility surrounding interest rates, expected fluctuations in market interest rates, etc. Another crucial factor that contributes to the interest rate premium paid by the buyer includes the difference between the interest cap and the expected interest rates. In most cases, the closer the interest rate cap is to the expected interest rates, the higher the interest rate cap premium would be. In most aspects, this premium resembles a call option premium. Consequently, the interest rate cap agreement helps compensate the seller for the risks they undertake on the contract. What is the tax treatment of Interest Rate Cap Premium?The IRS allows borrowers to treat any payments on an interest rate cap agreement as an interest expense relating to the underlying loan. This definition qualifies interest rate cap premiums as deductible interest income for the borrower. If the borrower receives compensation when the interest rates exceed the cap, this income is treated as income for the borrower. ConclusionAn interest rate cap is an agreement between two parties based on the interest rate of an underlying instrument. The seller of this cap agrees to pay a borrower if the interest rate on the underlying loan exceeds the cap. In exchange, the seller charges a price known as the interest rate cap premium. The tax treatment of the interest rate cap premium is similar to interest expenses. Post Source Here: Interest Rate Cap Premium
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What is a subprime credit score? A subprime credit score is a credit score that is below 600. This means that the individual has a history of not paying their debts on time or has defaulted on loans in the past. A person with a subprime credit score may have difficulty getting approved for a loan or may have to pay high interest rates if they are approved. In this blog post, we will explain what subprime credit scores and subprime loans are. What does subprime credit mean?A subprime credit score indicates that someone has a history of not making payments or missed payments on their credit cards, mortgages, car loans, and other types of debts. This can lead to difficulty getting approved for loans or high interest rates if they are approved. There are several factors that can contribute to a subprime credit score, including late or missed payments on loans, making only minimum monthly payments on credit cards, taking out too many loans at once, or defaulting on previous loans. In order to improve a subprime credit score, it is important to make on-time loan payments, keep credit card balances low, and avoid taking out too many loans at once. What is a subprime borrower?A subprime borrower is someone who has a credit score below 600, indicating that they have a history of not making loan payments on time or defaulting on loans in the past. This can make it difficult for subprime borrowers to get approved for new loans, and they may have to pay high interest rates if they are approved. There are several factors that can contribute to a subprime credit score, including missed or late payments, taking out too many loans at once, or defaulting on previous loans. In order to improve a subprime credit score, it is important to make payments on time, keep credit card balances low, and avoid taking out too many loans at once. Some strategies that can help include making a budget, tracking expenses, or working with a financial advisor. What is a subprime loan?A subprime loan is a type of loan that is given to borrowers who have a history of credit problems, such as missed or late payments or defaulting on loans in the past. A subprime loan may come with higher interest rates or other restrictions in order to help minimize the risk to the lender. To improve a subprime credit score and be able to qualify for better loans, it is important to make on-time payments and avoid taking on too much debt. FAQsHow do I know if my loan is subprime?There are several factors that can contribute to a subprime credit score, including missed or late payments, taking out too many loans at once, or defaulting on previous loans. If you have a credit score below 600, this may indicate that your loan is subprime and may come with higher interest rates or other restrictions. To find out for sure, you can contact your lender and ask about the terms of your loan, or check your credit report to see your credit score. Who qualifies for subprime loans?In general, subprime loans are given to borrowers with a history of credit problems, such as missed or late payments or defaulting on previous loans. This can make it more difficult to qualify for these types of loans, and borrowers may have to meet certain requirements or pay higher interest rates in order to be approved. However, there are some strategies that you can use, such as making on-time payments and keeping your credit card balances low, that can help you improve your credit score and qualify for better loans in the future. Are there any alternatives to taking out a subprime loan?There are a few different strategies that you can use if you need to take out a loan and have a subprime credit score. One option is to work with a financial advisor or credit counselor to create a budget and make plans for paying off your debt. Another strategy is to try to improve your credit score by making on-time payments and avoiding taking on too much debt. You may also want to consider looking into alternative lenders or peer-to-peer lending that may have more flexible requirements or offer lower interest rates. Ultimately, the best strategy will depend on your individual financial situation and needs. Can you refinance a subprime loan?It is possible to refinance a subprime loan, but this will generally depend on a variety of factors, such as your credit score and income level. If you have a history of missed or late payments, defaulting on loans, or taking on too much debt at once, you may have a more difficult time getting approved for refinancing. However, there are some strategies that you can try, such as working with a financial advisor or credit counselor to create a budget and improve your credit score. Additionally, you may want to consider looking into alternative lenders or peer-to-peer lending that may offer more flexible requirements or lower interest rates. Ultimately, the best approach will depend on your individual financial situation and needs. The bottom lineA subprime credit score is a rating that is given to borrowers who have a history of credit problems, such as missed or late payments or defaulting on loans. Subprime loans may come with higher interest rates or other restrictions in order to minimize the risk to the lender. To improve a subprime credit score and qualify for better loans in the future, it is important to make on-time payments and avoid taking on too much debt. There are several strategies that you can try, including working with a financial advisor or credit counselor, to help improve your credit score and get the best possible terms on your loans. Originally Published Here: Subprime Credit Scores and Loans: What You Need to Know? A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in industrial production, employment, real income, and other measures of economic activity. A recession generally occurs when there is a widespread drop in spending (an adverse demand shock). This may be caused by an external event such as a financial crisis, an increase in interest rates, a period of high oil prices, or a natural disaster. Alternatively, it may be caused by a more internal event such as a burst of technological innovation or a central bank raising interest rates to slow an overheating economy. There exist indicators that can be used to aid in predicting a recession. A common one is the yield curve, which is a graph of the yields on bonds of different maturities. An inverted yield curve (where short-term yields are higher than long-term yields) is often seen as a predictor of a recession. Reference [1] proposed the use of a so-called media recession indicator (MRI) to predict a recession. Basically, the authors measured the frequency with which the word “recession” appeared in financial and economic newspapers and used it as a sentiment indicator to predict a recession. They found out, … The indicators are based on articles in the Financial Times and the Wall Street Journal, and use different ways of weighting articles that include the key word “recession.” The constructed indicators outperform predictor variables that are well established in the literature. We view this textual-based analysis as complementary to more traditional approaches in predicting business cycles and the stock market. We believe our findings can be useful for central banks and investors interested in business cycles and investment management. In short, the proposed media recession indicator has predictive power and an investment strategy based on it outperformed Buy and Hold. Using their research results, the authors concluded that there is value in reading financial news. We note, however, that in order to be able to extract alpha from financial news, one has to use advanced analytical techniques such as natural language processing. This technique is not available to regular investors. Let us know what you think in the comments below or in the discussion forum. References [1] Baz, Salim and Cathcart, Lara and Michaelides, Alexander, What is the Value of Financial News? (2022). https://ssrn.com/abstract=4251414 Originally Published Here: Is It Worth Reading Financial News? What is credit monitoring? This is a question that a lot of people don't know the answer to. Credit monitoring is the process of tracking your credit score and reporting on a regular basis. It's important to keep an eye on your credit score because it can affect your ability to get loans, mortgages, and other types of financing. In this blog post, we will discuss the importance of credit monitoring and why you should care about your credit score. Importance of Credit MonitoringThere are a few main reasons why it is important to monitor your credit score and report on a regular basis. First, it helps you stay on top of any changes that may have been made to your credit report without your knowledge. Having an accurate picture of your credit history can help you avoid mistakes or inaccuracies in your report. Another reason why credit monitoring is important is that your credit score can affect your ability to get approved for loans, mortgages, and other types of financing. The higher your credit score, the easier it will be for you to get a loan at a low interest rate or even get approved for a mortgage. Therefore, you should always make sure that your credit score is as high as possible. How credit monitoring can benefit you?There are many benefits of credit monitoring. First, it allows you to keep a close eye on your credit score, which can help you prevent any mistakes or inaccuracies in your credit report. This can help you maintain a good credit score and avoid any negative consequences of having a low credit score, such as getting rejected for a mortgage or loan. In addition, credit monitoring can help you identify any signs of identity theft early on. If you notice any suspicious or unusual activity on your credit report, you can take action to address the issue before it gets out of hand. This can save you a lot of time, money, and hassle in the long run. Overall, credit monitoring is an important tool that can help you protect your financial future. By staying on top of any changes to your credit report, you can ensure that your credit score is high and keep yourself eligible for loans, mortgages, and other types of financing. If you are interested in getting started with credit monitoring, there are many companies that offer this service. Whatever your financial goals are, the right credit monitoring service can help you achieve them. If you are interested in getting started with credit monitoring, there are many companies that offer this service. Some examples include Credit Karma, Credit Sesame, and Mint. These companies will not only track your credit score and report on a regular basis, but they can also provide you with additional financial tools and resources to help you manage your money. So, if you're serious about taking control of your financial life, credit monitoring is a must. FAQsDo I need to monitor all 3 credit bureaus?No, you don't necessarily need to monitor all three credit bureaus. Depending on your financial situation and goals, you might only need to monitor one or two of your credit reports. It's important to choose a credit monitoring service that offers access to all three major bureaus, so you can get the most accurate picture of your credit history. How often should I monitor my credit score?The frequency with which you monitor your credit score will depend on your individual financial goals. For example, if you are planning to apply for a loan or mortgage in the near future, you might want to monitor your credit score more frequently in order to stay on top of any changes or updates. However, if you aren't planning to take out any major loans or financing in the near future, you may only need to monitor your credit score once a quarter or even less frequently. What factors impact my credit score?There are many different factors that can impact your credit score, including your payment history, the amount of debt you have, your credit utilization ratio, and the age of your accounts. It's important to stay on top of these factors and make sure that you are doing everything you can to maintain a good credit score. For more information, consult with a financial advisor or credit monitoring service. Where can I go to get more information about credit monitoring?There are many online resources available that provide information and advice on how to manage your credit. Some good places to start include websites like Credit Karma, Bankrate, and Nerd Wallet. You can also talk to a financial advisor or credit monitoring professional for more personalized advice on how to achieve your financial goals. Whatever your needs, there is likely a credit monitoring service that can help you achieve them. The bottom lineOverall, credit monitoring is an important tool for anyone who wants to take control of their financial life. By staying on top of any changes to your credit score and report, you can ensure that your financial future is protected. If you are interested in getting started with credit monitoring, there are many companies that offer this service. Whether you are looking to apply for a loan or mortgage in the near future, or simply want to maintain good credit, credit monitoring is a must. So, start doing your research today and find the right credit monitoring service for you. Article Source Here: What is Credit Monitoring and Why You Should Care Businesses use many strategies to get customers and defeat their competition. One of these strategies is known as loss leader pricing. It's the technique of lowering the price of a product to draw in customers with the hopes that they'll buy other higher-priced items as well. Loss leader pricing can be an effective marketing tool, but it's not without its risks. The most obvious risk is that you might not make any money on the item that you're selling at a loss. This can lead to losses for your business overall. What is Loss Leader PricingA common marketing/pricing strategy in which a company sells a product at a price below its cost to attract customers, with the expectation that they will buy other more profitable products as well. This strategy is often used by retailers during clearance sales or when introducing a new product. It can also be used by companies to increase market share or to penetrate a new market. Loss leader pricing can be an effective way to increase sales and grow a customer base. However, it can also lead to losses if not managed properly. For this reason, companies need to carefully consider their overall strategy and objectives before using this pricing approach. Advantages of Loss Leader PricingWhen used effectively, loss leader pricing can help you
However, loss leader pricing can also lead to losses if not managed properly. Therefore, it is important to consider your overall strategy and objectives before using this pricing approach. Disadvantages of Loss Leader PricingJust like any other marketing strategy, loss leader pricing has its disadvantages.
How to use Loss Leader Pricing effectively
Using loss leader pricing can be an effective way to increase sales and grow your customer base. However, it is important to consider your overall strategy and objectives before using this pricing approach. ConclusionA loss Leader Pricing strategy is a great way to increase sales, grow your customer base and penetrate a new market. It's mostly used by retail businesses but can be employed in other types of businesses as well. The key to success is to understand your strategy and objectives and to make sure you don't accidentally start a price war with your competitors. Post Source Here: Loss Leader Pricing: Definition, Strategy, Examples, Meaning, Advantages and Disadvantages When you are in the market for a new car, mortgage, or personal loan, your credit score is one of the most important factors that lenders will look at. Your credit score is a measure of how risky it is to lend money to you. A high credit score means that you are a low-risk borrower, and a low credit score means that you are a high-risk borrower. If you have bad credit, it can be difficult to get approved for a loan. One way to improve your credit score is by refinancing your current loans. In this blog post, we will discuss how refinancing can affect your credit score and whether or not it is worth doing. What is refinancing?Refinancing is when you take out a new loan to pay off an existing loan. For example, if you have a $10,000 car loan with a 6% interest rate, you could refinance that loan and get a lower interest rate or consolidate multiple loans into one new loan. Refinancing your current loans can help you save money and improve your credit score. How does refinancing affect your credit score?Refinancing can either help or hurt your credit score, depending on how you do it. If you refinance a loan with a higher interest rate than what is offered by other lenders, this could actually lower your credit score. On the other hand, if you refinance a loan with a lower interest rate and make on-time payments for the new loan, this can help boost your credit score. Whether or not refinancing is the right choice for you will depend on your individual financial situation. It is important to take the time to do your research and compare different loan options before deciding to refinance a loan. If you are interested in refinancing a current loan, it is a good idea to work with an experienced and reputable lender who can help you through the process. What are the negative effects of refinancing?The effects of refinancing your mortgage are generally negative. If you refinance a loan, you will have to pay the closing costs associated with it. Closing costs can be very expensive, especially if you are refinancing your mortgage. It is often a better financial decision to make extra payments on your mortgage instead of paying closing costs to refinance the loan. In addition, refinancing your mortgage will extend the number of years it takes to pay the loan off, which means that you will end up paying more in total interest over time. For this reason, it is usually not a good idea to refinance your mortgage unless you have a very good reason for doing it. FAQsIs it worth it to refinance?This will depend on your individual financial situation and your reasons for wanting to refinance. If you are interested in refinancing a loan, it is important to do your research and compare different loan options before making a decision. If you are refinancing your mortgage, it is generally not worth it to do so unless you have a very good reason for doing it. Before deciding to refinance, you should consider the costs and benefits of doing so. Should I refinance my mortgage?This will depend on your individual financial situation and goals. Before deciding to refinance your mortgage, it is important to carefully consider the costs and benefits of doing so. You should also compare different loan options before making a decision. It may be a good idea to consult with a financial advisor or mortgage expert who can help make the best decision for your situation. How long does it take for your credit score to go up after refinancing?There is no definite answer to this question, as the length of time that it takes your credit score to go up after refinancing will depend on a number of factors, including the type of loan that you are refinancing and how responsibly you manage your finances after refinancing. Generally speaking, making on-time payments for your new loan and keeping your debt levels low will help to improve your credit score over time. It is also important to avoid making any late payments or missing any scheduled monthly payments after refinancing. Overall, it is important to be patient and take the time to build good credit habits after refinancing, as this will help you improve your credit score over time. Why do banks want you to refinance?There are a number of reasons why banks might encourage you to refinance your loan, including the potential for increased profits and the desire to retain existing customers. Many banks offer incentives to encourage their customers to refinance, such as lower interest rates or fees. In addition, many banks will offer great rates to customers who have a good credit score and stable income. Ultimately, the decision to refinance is up to you and should be based on your individual financial goals and the overall costs and benefits of doing so. It is important to work with a reputable lender who can help you make an informed decision about your refinancing options. Who benefits from a refinance?There are a number of different parties who may benefit from a refinance, including the borrower, the lender, and the bank. For borrowers, refinancing can provide access to lower interest rates and more favorable terms, which can save money in the long run. For lenders and banks, a refinance can allow them to generate additional revenue from the loan. Ultimately, whether or not you benefit from refinancing will depend on your individual financial situation and the terms of your specific loan. It is important to carefully consider all costs and benefits before making a decision to refinance. Closing thoughtsIn conclusion, refinancing your current loans can help you save money and improve your credit score. However, it is important to do your research and compare different loan options before deciding to refinance a loan. If you are interested in refinancing a current loan, it is a good idea to work with an experienced lender who can help you through the process. Originally Published Here: How Does Refinancing Affect Your Credit Score? Investors invest in a company or business to receive returns in exchange. For companies, these returns come from dividends paid to shareholders. However, other business entities may not use these. For example, sole proprietorships, partnerships, etc., do not pay dividends. Instead, they allow owners to withdraw their profits through a drawing account. What is a Drawing Account?A drawing account is a financial account that records any drawings made by the owners of a business. These drawings usually include cash. In some cases, it may also contain other assets. A drawing account helps accountants track any profit distributions to the owners. However, it does not appear on the balance sheet on its own. A drawing account is a contra-equity account. Essentially, it reduces the equity balance in the balance sheet without appearing on the statement. Like dividends, drawings do not constitute an expense in the income statement. Instead, it represents a reduction in capital for the business. At the end of each year, accountants close this account with the balance reducing the owner's equity. What is the accounting for a Drawing Account?A drawing account holds any withdrawals from a business by its owners. In most cases, it includes a debit for the amount withdrawn by the owners. It also impacts the relevant asset account, which usually includes cash. During the year, accountants record all withdrawals from the business in this account. As stated above, a drawing account is a contra-equity account. It does not appear on the balance sheet on its own. However, it reduces the owners' equity reported in the statement. At the end of each period, accountants close the drawing account and transfer its balance to the equity account. It also constitutes a reduction in the owners' residual interest in the business entity. What is the journal entry for Drawing Account?The journal entry for a drawing account is straightforward. Usually, it includes the transaction where an owner withdraws resources from the business. In that case, the journal entry will be as below.
At the end of the period, accountants transfer any balances in the drawings account to the equity account. In this case, the balance in the equity account will decrease. The journal entry for the transaction will be as follows.
ExampleRed & Co. is a sole proprietorship. The owner withdrew $10,000 in cash for their personal use. The journal entry for this transaction is as follows.
The owner also withdrew a vehicle from the business. At the time, its carrying value was $5,000. The journal entry for the transaction is as follows.
At the end of the period, the accountants of Red & Co. transferred the drawings to the equity account. The journal entry for the transaction was as follows.
ConclusionBusinesses maintain a drawing account to record withdrawals of resources by their owners. Usually, it records owners withdrawing cash from the business for personal use. The drawings account does not appear on the balance sheet as it is a contra-equity account. At the end of each period, accountants transfer the balance in this account to the equity account. Post Source Here: Drawing Account: Definition, Journal Entry, Accounting, Examples, Meaning Have you ever received a medical bill that was much higher than you expected? You're not alone. In fact, medical bills are one of the leading causes of debt in America. And if you don't pay your medical bills on time, it can negatively affect your credit score. In this blog post, we will discuss the truth about medical bills and your credit score. We will also provide tips on how to manage your medical expenses and protect your credit rating. Do medical bills affect your credit score?Yes, medical bills can affect your credit score. If you fail to pay your medical bills on time or if you struggle to pay them off, this will be reflected in your credit report. Because a poor credit score can make it harder for you to qualify for loans and other types of financing in the future, it is important to manage your medical expenses carefully. Tips for protecting your credit score?There are several things that you can do to reduce the likelihood of medical bills affecting your credit score. For starters, it is important to keep track of all of your medical expenses, so you know exactly how much you owe and when your payments are due. You should also try to negotiate with your medical providers to reduce the cost of your services, if possible. Additionally, you may want to consider taking out a medical loan or using a healthcare credit card that allows you to pay for your expenses over time. These strategies can help you avoid late payments or defaulting on your medical bills, which will protect your credit score. With careful planning and attention to your medical expenses, you can keep your credit rating intact and enjoy good health. To learn more about this important topic, be sure to check out other blog posts on our website today. Can medical bills be removed from your credit report?Unfortunately, medical bills cannot be removed from your credit report once they have been listed. However, you can take steps to reduce the effect that these bills have on your overall credit rating by paying off any outstanding balances and making sure that all of your payments are made on time. Additionally, keeping track of your medical expenses and managing them effectively can help to reduce the likelihood that you will be affected by medical bills in the future. By following these tips, you can maintain a good credit score and avoid financial stress caused by unexpected medical expenses. FAQsWhat is the truth about medical bills and credit scores?Medical bills can affect your credit score in a number of ways, including causing late payments and making it more difficult to qualify for loans in the future. However, there are steps that you can take to minimize the impact that medical bills have on your credit score and manage your expenses more effectively. How can you prevent medical bills from affecting your credit score?There are several strategies that you can use to reduce the impact that medical bills have on your credit score, including keeping track of your medical expenses and managing them effectively, negotiating with your medical providers to reduce the cost of services, taking out a medical loan or using a healthcare credit card, and making sure your payments are made on time. How can medical bills be removed from your credit report?Unfortunately, medical bills cannot be removed from your credit report once they have been listed. However, you can take steps to improve your overall credit rating by managing your medical expenses, paying off any outstanding balances on time, and making sure that all of your payments are made on time. Additionally, keeping track of your medical expenses can help to reduce the likelihood that you will be affected by medical bills in the future. With careful planning and attention to your medical expenses, you can maintain a good credit score and avoid financial stress caused by unexpected medical expenses. To learn more about this important topic, be sure to check out other blog posts on our website today. Can medical debt be forgiven?There is no straightforward answer to this question, as the rules and regulations related to medical debt forgiveness can vary depending on your specific situation. Some medical debts may be eligible for forgiveness if they result from billing errors or service delays caused by the healthcare provider. Additionally, there are nonprofit organizations that offer debt relief services to help those in need. However, it is important to understand that forgiveness of medical debt may not be the best solution for your financial situation and that there are often associated fees and penalties involved. To learn more about medical debt forgiveness, be sure to consult a financial advisor or legal professional for personalized advice that is tailored to your specific needs. Do medical bills go away after 7 years?The regulations related to medical bills and their potential impact on your credit report can vary depending on a number of different factors. For example, some medical bills may be eligible for removal from your credit report after a certain period of time if they result from billing errors or service delays on the part of your healthcare provider. Additionally, there may be tax implications associated with medical debt that can impact how long it appears on your credit report. Closing thoughtsIn conclusion, managing your medical expenses effectively can help you to avoid financial stress caused by unexpected medical bills. By following these tips, you can maintain a good credit score and avoid the negative consequences that can result from medical debt. If you are struggling with medical debt and need help managing your expenses effectively, be sure to consult a financial advisor or legal professional for personalized advice that is tailored to your unique situation. Originally Published Here: Medical Bills and Your Credit Score Technical analysis is a technique that attempts to forecast future price movements by analyzing past price data and market trends. Technical analysts believe that all relevant information about a security is reflected in its price, and therefore believe that studying price changes can provide valuable insights into where the security is headed. Technical indicators are mathematical calculations based on price, volume, or open interest figures. They are used to try and predict future market trends by analyzing past data. Technical indicators are often used by traders to help make decisions about when to buy or sell a security. Reference [1] investigated the use of the Percent Bollinger (%b) indicator for trading. The Percent Bollinger indicator is a technical indicator that is derived from Bollinger Bands. Bollinger Bands are a volatility indicator that consists of three bands: an upper band, a lower band, and a middle band. The Percent Bollinger indicator is calculated by taking the difference between the security's price and the lower Bollinger Band and dividing it by the difference between the upper and lower Bollinger Bands. The article pointed out, This paper investigates the profitability of technical analysis in a portfolio of integrated oil and gas companies. Using data of 21 individual companies for the period 01/07/2011 to 30/06/2021, we examine the Percent Bollinger (%b) technical trading rule against the benchmark buy-and-hold (B&H) policy. Our results show that the %b generates positive returns, lower drawdowns and smaller ulcer index as compared to the B&H. Risk-return trade-off analysis confirms the superiority of the technical strategy, where it produces greater ulcer performance index, Sharpe and Sortino ratios. These metrics confirm that returns from the technical rule are not characterized by higher risks. Our findings suggest that stock prices of these oil and gas companies neither fully nor rapidly capture historical price patterns, allowing traders to exploit and earn abnormal returns. The results are inconsistent with weak form market efficiency. The results are interesting, but it appears that the authors have drawn their conclusion using in-sample testing only. What we found noteworthy is that the paper showed the increasing volume of academic research on technical analysis. Why is that? Because of the rise of social media, computing power, or something else? Let us know what you think in the comments below or in the discussion forum. References [1] Safwan Mohd Nor, and Nur Haiza Muhammad Zawawi, Technical trading profitability: Evidence from international oil and gas companies, AIP Conference Proceedings 2644, 030036 (2022) Post Source Here: Has Technical Analysis Become More Popular Than Ever? If you're thinking about adding an authorized user to your credit card account, you should know that it can help or hurt your credit score. An authorized user is someone who is not the primary account holder but has been added to the account to help the primary cardholder build credit. Sounds great, right? Well, it can be, but there are also some risks involved. In this blog post, we will discuss how an authorized user can affect your credit score and what you need to know before adding one. What is an Authorized User?A primary cardholder is a person who opened the account, and they are responsible for making payments on it. An authorized user is someone else who has been added to the account as an additional cardholder. They aren't required to make any payments on these cards; instead, their credit score will be affected based on how the primary cardholder manages the account. Why Do People Add an Authorized User?There are a few reasons why someone might add an authorized user to their credit card account. Often, it is for financial responsibility purposes. For example, if you have a young adult child but don't want them to get their own credit card yet, you might add them to your account as an authorized user. This way, the credit card company will report its activity (both positive and negative) to the three major credit reporting agencies. If they have mismanaged their spending with other cards, this can help them learn better financial habits by using their card responsibly. Another reason people add a user to their account is to help them build credit. If you are someone who has never had good credit, adding yourself as an authorized user on your parents' or other family members' account could be a great way to start building credit. The Risks of Adding an Authorized UserAdding an authorized user can be risky because that user might make so many charges that the card is maxed out. If a primary cardholder doesn't pay their bills on time, this can hurt their authorized user's credit score. Additionally, if the primary account holder defaults on their payments or goes into debt, it will be reflected in the user's credit report as well. One of the biggest risks of adding an authorized user is identity theft. If someone gains access to your credit card account information and spends a large amount of money, it can be devastating for both you and the authorized user. Before adding anyone to your credit card account, make sure they have good intentions and will use their debit or credit cards responsibly. How Adding an Authorized User Can Help Your Credit ScoreThere are a few ways that adding an authorized user to your credit card account can help build or improve your credit score. The first is by showing the user's activity on the major three credit bureaus: Equifax, TransUnion, and Experian. If you have been added as an authorized user, but are using the credit card responsibly, this will help you build a more solid credit history. Another way that adding an authorized user to your account can help your credit score is by removing certain negative factors from your report. For example, if you have several debts that are in collections and one of them has been paid off, it will help you improve your credit score. Putting Your Cards on AutopayIf you are planning to add an authorized user to your account, there is a good way to ensure they don't make any charges that you won't be able to pay off—putting your card on autopay. This way, whether or not your authorized user is making charges, the bill will get paid as long as you set aside enough money in your accounts. FAQsHow long does it take to build credit as an authorized user?It will depend on a number of factors, including your existing credit history and the actions of the authorized user. Generally speaking, however, if you are an authorized user and use your card responsibly (i.e., making all payments on time), you should start to see improvements in your credit score within 6-12 months. This can vary depending on your credit report and the actions of the authorized user, however, so it is important to be patient and continue making payments responsibly in order to see improvement over time. Additionally, if you have negative items on your credit report, such as late payments or collections accounts, these may take longer to be removed from your report, which can also affect your credit score. In order to maximize the impact of adding an authorized user to your account and improve your credit score, it is important to continue making payments on time and using your card responsibly over time. Finally, it is important to remember that the authorized user has no responsibility for your debt. In order to protect yourself from the potential risks associated with adding an authorized user, you should only add someone you trust and who you are confident will use their card responsibly. Does an authorized user gain credit?There is no definitive answer to this question, as it will depend on a number of factors including the user's existing credit history and the actions of the authorized user. Generally speaking, adding an authorized user to your credit card account can help build or improve their credit score in some cases, as long as they use their card responsibly. This can include factors such as making all payments on time and using the card regularly, which can help to build a positive credit history for the authorized user. Additionally, if there are negative items on your credit report, such as late payments or collections accounts, adding an authorized user may help remove these from their report over time. However, there are also risks associated with adding an authorized user, as they have no responsibility for your debt and cannot be held responsible if you end up falling behind on payments or accruing large amounts of debt. For this reason, it is important to evaluate the trustworthiness and financial responsibility of the authorized user before adding them to your account in order to minimize potential risks. Is there a downside to adding an authorized user?There can be potential downsides to adding an authorized user to your account, including the risk of falling behind on payments or accruing large amounts of debt. Additionally, if the authorized user makes purchases that you are unable to pay off, this may have a negative impact on your credit score. For these reasons, it is important to carefully consider the financial responsibility of the authorized user before adding them to your account, as this can help minimize potential risks and maximize the potential benefits. Additionally, if you are making the decision to add an authorized user, it is important to communicate with them about your expectations and responsibilities in order to establish clear guidelines for using the card. Finally, it is also important to regularly review your credit report and account statements in order to ensure that all charges are legitimate and to take steps to address any issues immediately. The bottom lineAdding an authorized user to your credit card account can be a useful strategy for building or improving your credit score, as long as you choose the right person and use your card responsibly over time. However, there are also risks associated with this approach, so it is important to carefully evaluate the potential benefits and risks before deciding to add an authorized user to your account. Ultimately, the decision about whether to add an authorized user is a personal one that will depend on your individual circumstances and financial goals. So if you are considering this option, be to do your research and carefully weigh the potential risks and benefits in order to make the right decision for your unique situation. Post Source Here: How an Authorized User Can Help (or Hurt) Your Credit Score |
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