Investment Terms and Concepts

Accountant’s Opinion – Florida Accountant Negligence and Misstatement Commercial and Business Litigation Attorney

Published on: May 5, 2013 | By Russell L. Forkey, P.A.

Florida Certified Public Accountant (CPA) or Public Accountant Negligence and Breach of Contract State and Federal Court Litigation Attorney:

An audit is a professional examination and verification of a company’s accounting documents and supporting data for the purpose of rendering an opinion as to their fairness, consistency, and conformity with generally accepted accounting principles.

An “Auditor’s Trail” is a step-by-step record by which accounting data can be traced to their source. Questions as to the validity or accuracy of an accounting figure can be resolved by reviewing the sequence of events from which the figure resulted.

Commercial Property – South Florida Business and Commercial Litigation and AAA Arbitration Attorney

Published on: May 5, 2013 | By Russell L. Forkey, P.A.

South Florida Commercial Property Dispute State and Federal Court and American Arbitration Association (AAA) Arbitration Attorney:

The phrase “Commercial Real Estate” includes income-producing property, such as office buildings, factories, warehouses, industrial parks, hotels, shopping centers and restaurants. Commercial property must usually be zoned for business purposes. It is possible to invest in commercial property directly, or through real estate investment trusts or real estate limited partnerships. Investors receive income from rents and capital appreciation if the property is sold at a profit. Investing in commercial property entails large risks, such as nonpayment of rent by tenants or a decline in property values.

The two main claims that arise from investments made in or relating to commercial property are fraud in the solicitation of the investment or mismanagement during the period of time that the investment is owned.

Commercial Paper – South Florida Business and Commercial Litigation and AAA Arbitration Attorney

Published on: May 5, 2013 | By Russell L. Forkey, P.A.

Commercial Paper – South Florida Business and Commercial Litigation and AAA (American Arbitration Association) Arbitration Attorney:

“Commercial Paper” is usually a short-term obligation with maturities ranging from 2 to 270 days issued by banks, corporations, and other borrowers to investors with temporarily idle cash. Such instruments are unsecured and usually discounted, although some are interest-bearing. They can be issued directly, by the issuer, or through brokers equipped to handle the enormous clerical volume involved. Issuers like commercial paper because the maturities are flexible and because the rates are usually marginally lower than bank rates. Certain ratings agencies rate commercial paper.

Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as providing legal or investment advice. If the reader has any questions concerning this post or commercial paper generally, you should contact a qualified professional. This would include issues such as whether or not this type of investment is a suitable investment for you or, in the case of default, what legal rights do you have.

Letter of Credit – South Florida Business and Commercial Litigation Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

Letter of Credit – South Florida Business and Commercial Litigation and Arbitration Attorney:

A Letter of Credit is an instrument or document issued by a bank guaranteeing the payment of a customer’s drafts up to a stated amount for a specified period. It substitutes the bank’s credit for the buyer’s and eliminates the seller’s risk. It is used extensively in international trade.

There are varied types of letters of credit. A commercial letter of credit is normally drawn in favor of a third party, called the beneficiary. A performance letter of credit is issued to guarantee performance under a contract. A traveler’s letter of credit is issued for the convenience of a traveling customers and typically lists correspondent banks at which drafts will be honored. A revolving letter of credit is issued for a specified amount and automatically renewed for the same amount for a specified period, permitting any number of drafts to be drawn so long as they do not exceed its overall limit. A confirmed letter of credit is provided by a correspondent bank and guaranteed by the issuing bank.

Interest Rate Risk – South Florida State and Federal Court Commercial and Business Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

Interest Rate Risk – South Florida State and Federal Court Breach of Contract and Business Litigation Attorney:

Interest rate risk is relates to the fact that changes in interest rates will adversely affect the value of an investor’s securities portfolio. For example, an investor with large holdings in long term bonds and utilities has assumed a significant interest-rate risk, because the value of those bonds and utility stocks will fall if interest rates rise. Investors can take various protective measures to hedge their interest-rate risk, such as buying interest-rate futures or interest-rate options contracts.

Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as providing legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.

Interest – Rate Options Contract – West Palm Beach, Florida FINRA Arbitration and Federal and State Court Litigation Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

Interest – Rate Options Contracts:

Interest rate options contracts are options contracts based on an underlying debt security. Options, unlike futures, give their buyers the right, but not the obligation, to buy the underlying bond at a fixed price before a specific date in the future. Option sellers promise to sell the bonds at a set price anytime until the contract expires. In return for granting this right, the option buyer pays a premium to the option seller. Yield-based calls become more valuable as yields rise, and puts become more valuable as yields decline.

Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If you have any questions concerning the contents of this post, you should contact a qualified professional.

Foreign Currency Futures and Options – Florida National Futures Association Arbitration Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

Foreign Currency Futures and Options:

Foreign currency futures and options are futures and option contracts based on foreign currencies, such as the British Pound, Euro and Japanese yen. The purpose of this post is to provide the reader with general information relative to these type of investments. Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon for legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.

The buyer of a foreign currency futures contract acquires the right to buy a particular amount of that currency by a specific date at a fixed rate of exchange, and the seller agrees to sell that currency at the same fixed price.

Emerging Growth Companies – Certain Unique Factors for Investors to Consider Before Investing in an IPO – South Florida FINRA Arbitration and Litigation Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

IPO Considerations Relating to Emerging Growth Companies:

One thing to keep in mind before investing in an IPO is that many disclosure and other requirements that now apply to public companies are phased in over time for what are called “emerging growth companies.” Emerging growth companies generally have less than $1 billion in revenue. A company will remain an emerging growth company for up to five years after becoming a public company, unless its revenue exceeds $1 billion or it exceeds certain other thresholds.

Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon for legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.

IPO (Initial Public Offering) – Important Factors to Consider Before Investing in an IPO – Florida FINRA Arbitration and Litigation Attorney

Published on: May 4, 2013 | By Russell L. Forkey, P.A.

Initial Public Offering (IPO):

Additional due diligence factors to consider before investing in an Initial Public Offering (IPO):

In addition to the due diligence factors that we discussed in an earlier post, which can be found here, an investor may want to take into consideration the following items when making an investment involving shares of a new public company.

Initial Public Offering (IPO) – FAQs and Due Diligence Issues – Florida FINRA Arbitration and Litigation Attorney

Published on: May 3, 2013 | By Russell L. Forkey, P.A.

What are some of the ways that an investor may learn about a company involved in an IPO (Initial Public Offering)?

An initial public offering (IPO) gives the investing public an opportunity to own and participate in the growth of a formerly private company. By their nature, however, IPOs can be risky and speculative investments. Consequently, it is important that you fully understand all of the information contained within the prospectus relating to the specific investment you are considering.

Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon for legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.