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Meaning / Definition of

8-k

Categories: Finance,

The securities and exchange commission (SEC) requires that all publicly traded companies use Form 8-k to report anything that could have a significant effect on the financial position of the company or the value of its shares. Events and changes that must be reported - in most cases within four days - include bankruptcy, mergers, acquisitions, amendments to the corporate charter or by-laws, a change of directors, a change in the fiscal year, and even a change of name or address of the company.A company's Form 8-k becomes public information once it is filed, and you can find the report in the SEC's EDGAR database. These 8-k filings are designed to level the playing field between general investors and investors who have special access to information about a company.

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Definition / Meaning of

Inflation-protected Security (TIPS)

Categories: Finance,

us treasury inflation-protected securities (TIPS) adust the principal twice a year to reflect inflation or deflation measured by the consumer price index (CPI). The interest rate is fixed and is paid twice a year on the adjusted principal. So if your principal is larger because of inflation you earn more interest. If it's lower because of deflation, you earn less.You can buy TIPS with terms of 5, 10, or 20 year at issue using a TreasuryDirect account or in the secondary market. At maturity you receive either the adjusted principal or par value, whichever is greater. You owe federal income tax on the interest you earn and on inflation adjustments in each year they're added even though you don't receive the increases until the security matures. However, TIPS earnings are exempt from state and local income taxes.These securities provide a safeguard against deflation as well as against inflation since they guarantee that you'll get back no less than par, or face value, at maturity.

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