Finelo Blog
Learn investing and trading, one article at a time. Practical guides, beginner-friendly explainers, and learning tips from the Finelo team.
Default Risk: How It Works, Example & Risks
Default risk is the possibility that a borrower will fail to make required debt payments on time, such as interest or principal on a bond.
Current Ratio: Formula, Example & Interpretation
The current ratio is a liquidity measure that compares a company’s current assets with its current liabilities.
Credit Spread: Formula, Example & Interpretation
A credit spread is the difference between the yield on a risky debt instrument and the yield on a comparable lower-risk benchmark, usually a Treasury security with a similar maturity.
Corporate Bonds: Yield, Costs & Risks
Corporate bonds are debt securities issued by companies to raise money. When you buy one, you are lending to the issuer rather than buying ownership; Investor.gov describes a bond as “a debt…
Contribution Margin: Formula, Break-Even & Example
Contribution margin is sales revenue minus variable costs—the amount left from each sale to help cover fixed costs and, after those fixed costs are covered, operating profit.
CAPM Formula: How to Calculate Expected Return
The CAPM formula is expected return = risk-free rate + beta × (market return − risk-free rate).
Capital Gains Tax: Rates, Rules & Examples
Capital gains tax is the tax that may apply when you sell a capital asset—such as a stock, fund, cryptocurrency position, real estate interest, or other investment—for more than your tax basis in it.
Bond Ratings: Grades, Defaults & Risks
Bond ratings are letter-grade opinions about an issuer’s credit risk: the chance that a borrower may fail to make promised interest or principal payments on a bond.
Bond Ladder: How It Works, Example & Risks
A bond ladder is a portfolio of bonds arranged so different pieces mature at different times.
Bond Convexity: Price, Yield & Interest-Rate Risk
Bond convexity measures the curve in the relationship between a bond’s price and yield.
Beta vs Alpha: How They Differ and How to Use Them
Beta vs alpha is a comparison between risk exposure and risk-adjusted performance.
Annualized Return: Formula, Example & Annualization
Annualized return is an investment’s gain or loss expressed as a yearly compounded rate.
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