About This Chapter
Investment Returns & Trade Settlement - Chapter Summary
This self-paced chapter is filled with engaging lessons you can study anytime to strengthen your comprehension of investment returns and trade settlements. No matter your current understanding of return on investment, cost basis reporting, dividend yield or cash dividends, we can improve your knowledge. Once you've completed this chapter, you will be ready to:
- Define stock dividends and stock splits
- Share and use the equation for calculating yield to maturity
- Provide and use the formulas for calculating yield to call (YTC)
- Give definitions for the annualized rate of return and total return
- Explain the meaning of a basis point
- Exhibit knowledge of benchmark investment returns with indices
- Discuss time frames as they relate to trade settlements
- Differentiate between a physical and book entry in finance
We make it easy to align your study of this chapter to your personal schedule by offering 24/7 access to all learning materials. Study your way by reviewing the lessons anytime you desire and revisiting as many times as you'd like. Get answers to any questions you have about specific topics by submitting them to our experts via the dashboard. If you want to confirm your understanding of investment return and trade settlement concepts before exam day, be sure to take our mini lesson quizzes and comprehensive practice test.
1. Return on Investment: Definition, Formula & Example
Return on investment is a crucial analytical tool used by both businesses and investors. In this lesson, you'll learn the basic formula, discover a variant used for shareholders, and be provided examples.
2. Cash Dividends & Dividend Payment
When a company decides to pay a dividend to shareholders, they first have to decide what type of dividend to pay. In this lesson, we'll examine the most common types of dividends and look at the timeline for cash dividend payments.
3. What Are Stock Dividends & Stock Splits?
In this lesson, we'll define corporation, shareholders, and stock. You'll also learn the benefits of stock ownership: dividends, capital gains, voting privileges, and stock splits. We'll also discuss the disadvantages of stock ownership.
4. What Is Dividend Yield? - Definition & Calculation
In this lesson, you'll learn about dividend yield while performing calculations with a hypothetical stockholder's portfolio. When you've finished with the lesson, use our online quiz to see how well you understood the formulas for dividend and portfolio yields and how to use them.
5. How to Calculate Yield to Maturity: Definition, Equation & Example
In this lesson, you will learn what yield to maturity is, discover the formula for calculating it, and see some examples of how the formula works and what it reveals about investments.
6. Annualized Rate of Return & Total Return
This lesson will introduce total rate of return and annualized rate of return. These concepts will be defined along with a formula for calculating each. Examples will then be used to illustrate each of these types of returns.
7. Basis Point: Definition, Value & Conversion
In this lesson, you will learn the definition and value of a basis point. You will also learn how to convert a basis point to a percentage and vice versa. Following this lesson will be a brief quiz to test your new knowledge.
8. Benchmark Investment Returns With Indices
This lesson will address the step-by-step process of bench marking portfolio performance and selecting the proper indices. We'll go over equities, bonds, real estate, and balanced indices.
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Other chapters within the SIE Exam Study Guide course
- Federal Laws & Regulations in the Securities Industry
- Regulatory Entities & Agencies
- Market Participants & Structure
- Federal Reserve & Market Impacts
- Economic Factors
- Equity Securities
- Debt Instruments
- Options in the Financial Industry
- Investment Companies & Packaged Products
- Municipal Fund Securities
- DPPs, REITs & Hedge Funds
- Exchange-Traded Products (ETPs)
- Overview of Investment Risks
- Trading Orders & Strategies
- Corporate Actions
- Customer Account Types & Registrations
- Anti-Money Laundering (AML)
- Books, Records & Privacy in Finance
- Public Communications & Suitability Requirements
- Prohibited Activities in the Financial Industry
- Regulatory Framework in the Security Industry