query,pos
What is a negotiable security and how are they related to derivatives?,"A negotiable security is a financial instrument that can be easily transferred or traded, such as stocks and bonds. Derivatives, like options and futures, derive their value from these securities. They're interrelated because derivatives often involve contracts based on the value of underlying negotiable securities. This relationship allows investors to hedge risk or speculate on price movements without owning the actual assets."
Why is it important to research a stock before buying it?,"Researching a stock before buying is crucial to assess its financial health, growth prospects, and potential risks. Understanding the company's fundamentals, earnings history, management team, and industry trends helps investors make informed decisions. It also aids in evaluating whether the stock is fairly valued or overvalued, reducing the risk of making uninformed investment choices and potentially suffering losses."
When are investments taxed?,"Investments are taxed based on various factors, including the type of investment, holding period, and applicable tax laws. Generally, investments incur taxes when they generate income, such as interest, dividends, or capital gains. Interest and dividends are typically taxed in the year they're received, while capital gains tax applies when assets like stocks or real estate are sold at a profit. Tax rates may vary based on investment duration and jurisdiction."