- Face value
- Related: Par value
- Fair price The equilibrium price for futures con-tracts. Also called the theoretical
- Feasible portfolio
- A portfolio that an investor can construct given the assets
- Feasible set of portfolios
- The collection of all feasible portfolios.
- Federal funds
- Deposits held in reserve for depository institutions at their district
Federal Reserve Bank.
- Federal funds market
- The market where banks can borrow or lend reserves,
allowing banks temporarily short of their required reserves to borrow reserves from
banks that have excess reserves.
- Federal funds rate
- The interest rate charged to borrow funds in the federal funds
- Federally related institutions
- Arms of the federal government that arc exempt from
SEC registration and whose securities are backed by the full faith and credit of the
U.S. government (with the exception of the Tennessee Valley Authority).
- The price at which an order is executed.
- Fill or kill order
- A trading order that is canceled unless executed within a designated
time period. Related: Open order
- The percentage by which the price of a security must change in order to
trigger its purchase or sale.
- Financial analysts
- Also called securities analysts and investment analysts,
professionals who analyze financial statements, interview corporate executives, and
attend trade shows, in order to write reports recommending either purchasing, selling,
or holding various stocks.
- Financial leverage ratios
- Related: Capitalization ratios
- Financial market
- An organized institutional structure or mechanism for creating and
exchanging financial assets.
- Financial risk
- The risk that the cash flow of an issuer will not be adequate to meet
its financial obligations.
- First-in-first-out (FIFO)
- A method of valuing the cost of goods sold that uses the cost
of the oldest item in inventory first.
- First notice day
- The first day, varying by contracts and exchanges, on which notices
of intent to deliver actual financial instruments or physical commodities against futures
- Fixed-charge coverage ratio
- A measure of a firm's ability to meet its fixed-charge
obligations: the ratio of (net earnings before taxes plus interest charges paid plus long-
term lease payments) to (interest charges paid plus long-term lease payments).
- Fixed-income equivalent
- Also called a busted convertible, a convertible security that
is trading like a straight security because the optioned common stock is trading low.
- Fixed-income instruments
- Assets that pay a fixed-dollar amount, such as bonds and
- Fixed-income market
- The market for trading bonds and preferred stock.
- Fixed-rate payer
- In an interest rate swap the counterparty who pays a fixed rate,
usually in exchange for a floating-rate payment.
- Flattening of the yield curve
- A change in the yield curve where the spread between
the yield on a long-term and short-term Treasury has decreased. Compare
steepening of the yield curve and butterfly shift.
- Floating-rate contract
- A guaranteed investment contract where the crediting rate is
tied to some variable ("floating") interest rate benchmark, such as a specific-maturity
- Floating-rate payer
- In an interest rate swap, the counterparty who pays a rate based
on a reference rate, usually in exchange for a fixed-rate payment
- Floor broker
- A member who is paid a fee for executing orders for clearing members
or their customers. A floor broker executing customer orders must be licensed by the
- Floor trader
- A member who generally trades only for his own account, for an
account controlled by him or who has such a trade made for him. Also referred to as
- Flow-through method
- The practice of reporting to shareholders using straight-line
depreciation and accelerated depreciation for tax purposes and "flowing through" the
lower income taxes actually paid to the financial statement prepared for shareholders.
- Foreign market
- Part of a nation's internal market, representing the mechanisms for
issuing and trading securities of entities domiciled outside that nation. Compare
external market and domestic market.
- Forward contract
- A cash market transaction in which delivery of the commodity is
deferred until after the contract has been made. It is not standardized and is not
traded on organized exchanges.
- Forward rate
- A projection of future interest rates calculated from either the spot
rates or the yield curve.
- Full faith-and-credit obligations
- The security pledges for larger municipal bond
issuers, such as states and large cities which have diverse funding sources.
- Full price
- Also called dirty price, the price of a bond including accrued interest.
- Fully modified pass-throughs
- Agency pass-throughs that guarantee the timely
payment of both interest and principal. Related: Modified pass-throughs
- Fund family
- Set of funds with different investment objectives offered by one
management company. In many cases, investors may move their assets from one
fund to another within the family at little or no cost.
- Fundamental beta
- The product of a statistical model to predict the fundamental risk
of a security using not only price data but other market-related and financial data.
- Fundamental descriptors
- In the model for calculating fundamental beta, ratios in risk
indexes other than market variability, which rely on financial data other than price
- Funding ratio
- The ratio of a pension plan's assets to its liabilities.
- Funding risk.
- Related: Interest rate risk
- A term used to designate all contracts covering the sale of financial
instruments or physical commodities for future delivery on a commodity exchange.
- Futures commission merchant
- A firm or person engaged in soliciting or accepting
and handling orders for the purchase or sale of futures contracts, subject to the rules
of a futures exchange and, who, in connection with such solicitation or acceptance of
orders, accepts any money or securities to margin any resulting trades or contracts.
The FCM must be licensed by the CFTC. Related: Commission house, Omnibus account
- Futures contract
- A standardized, transferable legal agreement to make or take
delivery of a specified amount of a certain commodity of a certain grade or type at a
specific point in the future. The price is determined at the time the agreement is made.
Futures contracts must be traded on organized futures exchanges.
- Futures contract multiple
- A constant, set by an exchange, which when multiplied by
the futures price gives the dollar value of a stock index futures contract.
- Futures option
- An option on a futures contract. Related: Options on physicals.
- Futures price
- The price at which the parties to a futures contract agree to transact
on the settlement date.
Click here for Finance Glossary Search Index
Click here for Campbell Harvey's Home Page