Investment Returns: Rapid Fire
Chapters in this video
- 0:00 Unrealized vs. realized gains and the sell button
- 1:49 Current yield, total return, and basis points
- 2:55 D-E-R-P timeline and the T+1 settlement trap
- 5:00 Cost basis methods: FIFO, specific identification, average cost
- 6:20 Price-weighted Dow vs. market-cap indexes
- 7:14 Rapid-fire exam recap: top gotchas
What this video covers
- How to distinguish realized gains from unrealized gains, and why a rising unsold stock is not yet spendable cash
- Why current yield only measures income and total return is the most comprehensive performance measure
- What basis points are, how to convert them to percentages, and why the exam tests 100 basis points = 1%
- The standard corporate dividend timeline using D-E-R-P, and how T+1 settlement makes the ex-date and record date the same business day
- Why buying on or after the ex-dividend date means no dividend, and how mutual funds flip the order to D-R-E-P
- How cash dividends, stock dividends, and return of capital differ in tax treatment and cost basis impact
- Why the Dow Jones Industrial Average is price-weighted while the S&P 500, NASDAQ, and Russell 2000 are market-cap weighted, and why you cannot invest directly in any index
Read the full lesson, free
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