Definitions Starting with "F"

F. Duane Ackerman

F. Duane Ackerman is the former CEO of BellSouth Corporation from 1997 to 2006. Read more

FAAMG Stocks

FAAMG is an acronym that describes five of the most popular tech stocks whose parent companies have come to influence so many of our purchases and a large part of the market: Facebook, Apple, Amazon, Microsoft, and Google (now called Alphabet). The five stocks all trade on the NASDAQ, which lists more than 3,300 stocks, including many of the more successful tech and growth stocks. Read more

FAANG Stocks

FAANG is an acronym that describes five of the most popular tech stocks whose parent companies have come to influence so many of our purchases and a large part of the market: Facebook, Apple, Amazon, Netflix, and Google (now called Alphabet). The five stocks all trade on the NASDAQ, which lists more than 3,300 stocks, including many of the more successful tech and growth stocks. Read more

Fabless Company

A fabless company is a company that designs, develops and markets but does not manufacture silicon wafers. "Fab" is short for "fabrication. Read more

Face Value

Face value, also referred to as par value or nominal value, is the value shown on the face of a security certificate, including currency. The concept most commonly applies to stocks and bonds, so it is particularly important to bond and preferred stock investors. Read more

Face-Amount Certificate Company

A face-amount certificate company is a company that borrows from investors and offers its assets or other securities as collateral. For example, let's assume that Company XYZ is a privately held investment company that wants to acquire two companies. Read more

Facility

A facility is essentially a bank loan agreement that a company can use on and off for short-term borrowing purposes. For example, let’s assume Company XYZ is a jewelry manufacturer. Read more

Factor

A factor is a financial institution that purchases receivables from a company. Let's say Company XYZ sells widgets. Read more

Factors of Production

In economics, the term factors of production refers to land, labor, and capital: the three inputs that make all commerce possible. Some economists also include entrepreneurship a factor of production. Read more

Factory Orders

Factory orders are the dollar value of orders for goods from factories. The U. Read more

FactSet

FactSet is a financial data and software company. FactSet's software platform offers real-time news, quotes and tools that help analysts screen for certain securities and test portfolio models. Read more

Fade

A fade is an investment strategy devoted to doing the opposite of the prevailing wisdom. In the brokerage sector, it also refers to a dealer's inability or refusal to fill an order at the prevailing bid/ask spread the dealer has published (that is, the dealer "fades" from trading). Read more

Fair and Accurate Credit Transactions Act (FACTA)

The Fair and Accurate Credit Transactions Act (FACTA) allows consumers to get a free credit report from the three major credit reporting agencies every 12 months in order to help prevent identity theft. [InvestingAnswers Feature: The Hidden Costs of "Free" Credit Reports] FACTA does many things to protect consumers from fraud and identity theft. Read more

Fair Credit Billing Act (FCBA)

The Fair Credit Billing Act (FCBA) is an amendment to the Truth in Lending Act. The FCBA is meant to protect consumers from unfair or inaccurate billing practices by providing a system for consumers to contest inaccurate credit card bills. Read more

Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is the principle legislation for consumer credit rights in the U. S. Read more

Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a section of the consumer credit protection act that aims to promote fairness in the collection of consumer debts and provide a way for clarifying and challenging debt information to ensure its validity. The Fair Debt Collection Practices Act protects consumers’ rights in the context of debt collection. Read more

Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) contains well-known American labor law standards regarding minimum wage, overtime pay and child labor, among others. The FLSA is enforced by the U. Read more

Fair Market Value

Fair market value is the price at which a willing seller sells a good or service to a willing buyer. Let's assume John Doe wants to sell his house. Read more

Fair Trade Investing

Fair trade investing is an investment strategy whereby the investor only buys and sells companies that promote fair trade with suppliers in developing nations. For example, if John Doe wanted to adopt a fair trade investing strategy, he would only purchase the securities of companies that, say, have strong environmental practices, pay living wages to workers in developing countries, and promote equal pay for suppliers. Read more

Fair Value

Fair value is an estimate of a security's worth on the open market. There is no one way to calculate the fair value for a security, but calculations typically take into account future growth rates, profit margins, and risk factors, among other items. Read more

Fallen Angel

A fallen angel is a bond which once carried a high rating and displayed exceptional performance, but has since experienced a serious sustained decline in ratings and market demand. For the last five years, the Standard & Poor's agency gave Company XYZ an investment-grade rating of A, meaning it believes XYZ is a quality company with low credit risk. Read more

Falling Knife

A falling knife describes a stock which has experienced a rapid decline in value in a short amount of time. Just like a falling knife, you don't want to catch these companies on their way down. Read more

FANG Stocks

FANG is an acronym that describes the four most popular tech stocks whose parent companies have come to dominate our lives and the market: Facebook, Amazon, Netflix, and Google (now called Alphabet). The four stocks all trade on the NASDAQ, where more than 3,300 corporations list their shares. Read more

Fannie Mae (FNMA)

Fannie Mae (OTC: FNMA) is the nickname for the Federal National Mortgage Association (FNMA). Established in 1938, Fannie Mae's purpose is to create a secondary market for the purchase and sale of mortgages. Read more

FDIC Insured Account

An FDIC insured account is a bank account whose balance is covered by the Federal Depository Insurance Corporation (FDIC) in the event of a bank failure. The FDIC is an agency of the U. Read more

Federal Deposit Insurance Corporation (FDIC)

The Federal Deposit Insurance Corporation (FDIC) is an agency of the U. S. Read more

Federal Discount Rate

The federal discount rate is the interest rate at which a bank can borrow from the Federal Reserve. To understand the federal discount rate, it is important to understand that banks derive income from making loans. Read more

Federal Farm Credit System (FFCS)

The Federal Farm Credit System (FFCS) is a group of lenders that provide loans and other credit services to farmers, ranchers, and producers or harvesters of aquatic products.  People or businesses that process or market products from farmers, ranchers, or aquatic producers may also be eligible for FFCS loans, as are certain rural homeowners, utility cooperatives, and farm-related businesses. Read more

Federal Financial Institutions Examination Council (FFIEC)

The Federal Financial Institutions Examination Council (FFIEC) is an interagency body of the U. S. Read more

Federal Funds

Federal funds are monies held by banks at the Federal Reserve to meet reserve requirements. Funds in excess of reserve requirements can be loaned to other banks in order for those banks to meet reserve requirements. Read more

Federal Funds Rate

The federal funds rate is the interest rate banks charge each other on loans used to meet reserve requirements.  The federal funds rate is often confused with the discount rate, which is the interest rate the Federal Reserve charges on loans directly from the Federal Reserve Bank. Read more

Federal Home Loan Bank System (FHLB)

Created by Congress in 1932, the Federal Home Loan Bank System (FHLB) is a lending system for financial institutions. FHL banks offer loans to their members, which are other banks, credit unions, community development financial institutions and insurance companies. Read more

Federal Home Loan Mortgage Corporation (Freddie Mac)

The Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") is a government-sponsored entity that buys certain types of mortgages from banks and uses them to collateralize mortgage-backed securities. Freddie Mac also supplies a variety of periodic housing and mortgage data to the public. Read more

Federal Income Tax

Federal income tax is a tax on a range of certain kinds of income. Taxpayers generally calculate and pay federal income tax by filing an IRS Form 1040 by April 15 of each year. Read more

Federal Insurance Contributions Act (FICA)

The Federal Insurance Contributions Act (FICA) is a US payroll tax used to fund the Social Security and Medicare programs. These programs are designed to support those without wage income: retirees, dependents of non-working adults, and those with disabilities. Read more

Federal National Mortgage Association (Fannie Mae)

Established in 1938, the Federal National Mortgage Association or (Fannie Mae) has the purpose of creating a secondary market for the trading of mortgages. In 1968, Fannie Mae transitioned from a government entity to a quasi-governmental, federally chartered corporation in order to buy mortgages other than those insured by the Federal Housing Administration (FHA). Read more

Federal Open Market Committee (FOMC)

The Federal Open Market Committee (FOMC) is main policy-making body of the Federal Reserve. The FOMC is responsible for conducting open market operations. Read more

Federal Reserve Bank

Federal Reserve Bank refers to any of the 12 branches of the Federal Reserve System overseeing the implementation of U. S. Read more

Federal Reserve Board (FRB)

The Federal Reserve Board (FRB), officially called the Federal Reserve Board of Governors, is the Federal Reserve System's primary decision-making body. There are seven members on the FRB, each appointed to a 14-year term by the President of the United States with the advice and consent of the Senate. Read more

Federal Reserve Note

A Federal Reserve note is the formal name of U. S. Read more

Federal Reserve System (FRS)

The Federal Reserve System (FRS) is the U. S. Read more

Federal Tax Bracket

A federal tax bracket is range of incomes for which a certain federal income tax rate applies. The United States has a progressive tax system, which means that different portions of a person's or company's income are taxed at increasing rates (that's why the rates are often referred to as marginal tax rates). Read more

Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) protects consumers and businesses from practices that can cause markets to become unfair and anti-competitive. The Federal Trade Commission is divided into three bureaus that have different regulation and protection responsibilities. Read more

Federal Work Study Program (FWSP)

The Federal Work Study Program (FWSP) is a form of financial aid awarded to a student who has completed a FAFSA and has demonstrated a financial need. The student is given a job (usually on-campus) and is paid by the school. Read more

Fiat Money

Fiat money refers to any currency lacking intrinsic value that is declared legal tender by a government.  As valid currency solely by virtue of a government declaration, fiat money is not backed by any commodity, such as gold, but only by the faith of the bearer. Read more

FICO Score

A FICO score, created and calculated by the Fair Isaac Corporation, is a measure of an individual's creditworthiness. It is a mathematical summary of the information on a person's credit report. Read more

Fiduciary

A fiduciary is a person or entity responsible for managing a qualified retirement plan in accordance with the Employee Retirement Income Security Act (ERISA). In a broader sense, a fiduciary is a person or entity responsible for acting in the best interests of others -- typically an investment client, a company's shareholders or a beneficiary. Read more

Fill or Kill (FOK)

Fill or kill (FOK) is a client's instruction to his or her broker to either fill the entire order immediately or to cancel the order. Let's assume you want to purchase 1 million shares of Company XYZ at $20 per share. Read more

Final Maturity Date

A final maturity date is the date upon which all principal and interest must be repaid. Any debt instrument is made of interest and principal components which an issuer is implicitly obligated to repay. Read more

Finance Charge

A finance charge is the fee charged to a borrower for the use of credit extended by the lender. Broadly defined, finance charges can include interest, late fees, transaction fees, and maintenance fees and be assessed as a simple, flat fee or based on a percentage of the loan, or some combination of both. Read more

Financial Accounting Standards Board (FASB)

The Financial Accounting Standards Board (FASB) is an independent non-profit body responsible for the institution and interpretation of Generally Accepted Accounting Principles (GAAP). FASB was formed in 1973 and serves as the arm of the SEC responsible for governing the accounting standards for U. Read more

Financial Advisor

A financial advisor (also sometimes spelled "financial adviser") is an educated investment professional who helps people and businesses set and meet long-term financial goals. A financial advisor is similar to an investment advisor, financial planner, investment manager, or investment consultant. Read more

Financial Analyst

A financial analyst gathers and interprets data about securities, companies, corporate strategies, economies, or financial markets. Financial analysts are sometimes called securities analysts, equity analysts, or investment analysts (although there is a distinction among these titles). Read more

Financial Engineer

A financial engineer uses quantitative and technical skills to develop financial strategies and products. Financial engineers design, create and implement new financial instruments, models and processes to solve problems in finance and take advantage of new financial opportunities. Read more

Financial Engineering

Financial engineering is the quantitative, technical development of financial strategies and products. Financial engineers design, create and implement new financial instruments, models and processes to solve problems in finance and take advantage of new financial opportunities. Read more

Financial Guarantee

In general, a financial guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. The entity assuming this responsibility is called the guarantor. Read more

Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority (FINRA) is an independent non-profit corporation that regulates the actions of securities firms in the United States.   In order to deal in securities in the United States, firms are required to become members of FINRA, unless they are regulated by another self-regulatory organization (SRO). Read more

Financial Market

A financial market is a location where buyers and sellers meet to exchange goods and services at prices determined by the forces of supply and demand. A financial market may be a physical location or a virtual one over a network (for example, the Internet). Read more

Financial Planner

A financial planner is a credentialed professional who, for a fee, assists individuals and organizations in reaching their financial goals and increasing their net worth through careful investing and money management on the basis of their means and financial status. A financial planner is similar to an investment advisor, investment manager, investment consultant, or financial advisor. Read more

Financial Planning and Analysis (FP&A)

There are two parts to FP&A: financial planning and financial analysis. Financial planning is the process of creating a complete account of an individual’s or business’s plan for long-term security. Read more

Financial Risk Manager

Issued by the Global Association of Risk Professionals (GARP), the Financial Risk Manager (FRM) designation recognizes individuals who have expert knowledge in the field of financial risk assessment for banks, insurance companies, accounting firms, regulatory agencies, asset and wealth management firms, and other financial institutions.   Candidates must successfully complete a two-part exam that focuses on the primary strategic disciplines of financial risk management which include: market risk, credit risk, operational risk, and investment management. Read more

Financial Times 100 Index (FTSE)

The Financial Times 100 Index (FTSE), also known as the "footsie," is the most widely used benchmark for the performance of equities traded on the London Stock Exchange. Started in January 1984 with an initial value of 1,000, the index contains the 100 largest U. Read more

Firewall

Firewall refers to the strict separation between banking and brokerage activities within full-service banks, and between depository and brokerage institutions as stipulated by the Glass-Steagall Act of 1933. Prior to the Great Depression, investors would borrow on margin from commercial banks and use the money to purchase stocks. Read more

First In, First Out (FIFO)

First in, first out (FIFO) is an accounting method for inventory valuation that assumes that goods are sold or used in the same chronological order in which they are acquired. The accounting method of first in, first out (FIFO) assumes that merchandise purchased first is sold first. Read more

First-Time Homebuyer

A first-time homebuyer an individual or couple purchasing a home for the first time. The IRS also considers someone who has not owned a home in the past two years to be a first-time homebuyer. Read more

Fiscal Deficit

Fiscal deficits occur when a government's expenditures exceed its revenue. A deficit is the opposite of a surplus. Read more

Fiscal Policy

Fiscal policy refers to a government's spending and taxation policies intended to maintain economic stability, which is indicated by levels of unemployment, interest rates, prices and economic growth. A government is capable of directly affecting economic activity in response to fluctuations in macroeconomic growth. Read more

Fiscal Quarter (Q1, Q2, Q3, Q4)

A fiscal quarter is a consecutive three-month period within a company’s fiscal year. These calendar divisions are used by publicly-traded companies to schedule the release of financial reports and the payment of stock dividends. Read more

Fiscal Year

A fiscal year is an accounting period of 365(6) days that does not necessarily correspond to the calendar year beginning on January 1st. The fiscal year is the established period of time when an organization's annual financial records commence and conclude. Read more

Fiscal Year-End

A fiscal year-end is the end of a 12-month, 365-day, or 13-period (or other measure) period of time. Let's say Company ABC has a fiscal year that begins Jan. Read more

Fisher Effect

The Fisher Effect is an economic hypothesis stating that the real interest rate is equal to the nominal rate minus the expected rate of inflation. In the late 1930s, U. Read more

Fixed Annuity

A fixed annuity offers a fixed rate of return, and all its future payments are equal amounts. Assume you'd like to invest in a vehicle that will provide you with guaranteed monthly payments of $1,167 every month for as long as you live after you retire. Read more

Fixed Asset

A fixed asset is anything that has commercial or exchange value, generates revenue, has a life longer than one year and has a physical form. Let’s assume XYZ Company intends to purchase an office building for $10 million. Read more

Fixed Costs

Fixed costs are independent expenses that companies must pay, regardless of what their business does. Because they cover expenses that help keep the business up and running, they are sometimes referred to as overhead costs. Read more

Fixed Exchange Rate

A fixed exchange rate pegs one country's currency to another country’s currency. It is also known as a pegged exchange rate. Read more

Fixed Income

Fixed income is a category of investments where an investor is lending money to the issuer and receives a fixed interest payment periodically until the investment matures. At maturity, the original principal amount is returned to the investor. Read more

Fixed Income Security

A fixed income security is an investment that pays regular income in the form of a coupon payment, interest payment or preferred dividend. Fixed income securities provide periodic income payments at an interest or dividend rate known in advance by the holder. Read more

Fixed Interest Rate

A fixed interest rate is a type of loan or mortgage for which the rate of interest does not fluctuate over the life of the loan. The most common types of mortgages carry either a fixed or variable interest rate. Read more

Fixed-Rate Capital Securities

Fixed-rate capital securities are fixed income securities that have features of both corporate bonds and preferred stock. Similar to a hybrid security, fixed-rate capital securities have features of both preferred stock and corporate bonds. Read more

Flag Formation

The flag formation is a technical analysis pattern that occurs when there is a straight upward move in a stock.  The flag formation movement is often nearly vertical, and at the very least is extremely steep. Read more

Flat Tax

A flat tax is a system under which all taxpayers pay taxes at the same percentage rate of their total income. Let's assume that you had $100,000 of taxable income last year. Read more

Flat Yield Curve

Flat yield curve refers to a yield curve which reflects little or no disparity between short-term and long-term interest rates. A flat yield curve is essentially a horizontal line representing similar yields for short-term and long-term debt securities in the same credit category, as shown below: Under these circumstances, for instance, a bond with a 30-year term would have virtually the same yield as a similarly-rated bond with only a five-year term. Read more

Fleet Card

A fleet card is a type of plastic payment card, either debit or credit, that is issued to employees to pay for expenses related to vehicle operations, notably fuel and maintenance. Payment of vehicle-related costs through a fleet card system enables a company to keep close track and tightly manage expenses related to fleet vehicles they own and operate. Read more

Flight to Quality

A flight to quality is the act of moving capital away from "risky" investments and toward "safer" investments due to uncertainty about the overall economy. Anything that increases uncertainty in the markets can cause a flight to quality. Read more

Float

A company's float is an estimate of the number of outstanding shares available for the public to trade. Float, sometimes referred to as free float or "public" float, does not include restricted shares (shares owned by company officers, management, and other various insiders) because it's assumed that those shares are being held on a very long-term basis. Read more

Floating Exchange Rate

A floating exchange rate refers to changes in a currency's value relative to another currency (or currencies). Floating exchange rates mean that currencies change in relative value all the time. Read more

Floating Interest Rate

A floating interest rate is an interest rate that can change from time to time. Let's say you want to borrow $5,000 to start a business. Read more

Floor Broker

A floor broker, also known as a pit broker, is a brokerage firm employee who executes orders on the floor of a stock or commodity exchange on behalf of clients. A floor broker receives an order from a client through his or her brokerage firm and trades the security with other brokers on the exchange floor. Read more

Follow-On Offering

A follow-on offering, also called a secondary offering, is a sale of stock by a company or by an existing shareholder of a company that is already publicly held. Let's say Company XYZ is a public company and would like to sell additional shares in order to raise money to build a new factory. Read more

Fool's Gold

Fool's gold is a shiny mineral called pyrite which bears great resemblance to, and is often confused with, real gold. Actually an iron-based mineral, pyrite is known for being yellow and shiny and appearing no different from real gold. Read more

Footsie

Footise is slang for the Financial Times 100 Index, or FTSE, which is the most widely used benchmark for the performance of equities traded on the London Stock Exchange. Started in January 1984 with an initial value of 1,000, the index contains the 100 largest U. Read more

Forbearance

Forbearance, which literally means "holding back," is a temporary suspension of loan payments agreed to by both lender and borrower as an alternative to defaulting on the loan (or foreclosure in the case of a mortgage). Lenders choose forebearance agreements in order to avoid the loss and costs of a loan default. Read more

Forced Liquidation

Forced liquidation is the sale of all investments within a customer's margin account by a brokerage firm, usually after the account has failed to meet margin requirements and margin calls. To engage in trading investments on margin, brokerage firms generally require their investing clients to follow the firm's rules on margin requirements. Read more

Foreclosure

Foreclosure occurs when a lender seizes and sells a borrower's collateral after the borrower has failed to repay the lender. The term is most often associated with real estate. Read more

Foreign Currency Effects

Foreign currency effects refer to the fluctuations in returns on offshore investments as a result of changes in the value of the investment's denominated currency against that of the domestic currency. Investors who hold securities issued in foreign countries bear the effects of foreign currency fluctuations as manifest in lower or higher returns upon repatriation to the domestic currency. Read more

Foreign Debt

Foreign debt, otherwise known as external debt, is the part of total debt held by creditors of foreign countries, i. e. Read more

Foreign Exchange (Forex)

Foreign Exchange, also known as  Forex or FX, is an over-the-counter market. Forex trading is how individuals, banks, and businesses convert one currency into another. Read more

Foreign-Exchange Risk

Foreign-exchange risk refers to the potential for loss from exposure to foreign exchange rate fluctuations. Foreign-exchange risk is similar to currency risk and exchange-rate risk. Read more

Forensic Accounting

Forensic accounting is a form of investigative accounting which examines financial records in order to find evidence for a lawsuit or criminal prosecution. Forensic Accounting is sometimes referred to as forensic auditing. Read more

Forensic Auditing

Forensic auditing examines individual or company financial records as an investigative measure that attempts to derive evidence suitable for use in litigation. Forensic auditing can sometimes be referred to as forensic accounting. Read more

Forever Stock

Forever stock is a term used by InvestingAnswers to describe a stock that you can buy and hold for the rest of your life.   InvestingAnswers describes them as "high-quality securities that you can count on for strong, steady returns -- year after year -- all while ensuring you get a good night's sleep. Read more

Forgivable Loan

A forgivable loan is a type of loan in which some (or all) of the amount can be forgiven or deferred if the borrower meets certain conditions. Since the loan balance is waived when the requirements are met, it is often considered a grant with conditions rather than a loan. Read more

Form 1040X

Mistakes happen, and the IRS understands that (though the jury is still out regarding how forgiving the IRS is about mistakes). For this reason, the IRS provides the Form 1040X, which requires a line-by-line description of any necessary adjustments, as well as supporting documentation and explanations. Read more

Form 1045 Application for Tentative Refund

Taxpayers must file a Form 1045 within one year after the end of the year in which the loss or unused credit occurred, and they will likely also have to file amended returns. It is important to note that using Form 1045 can trigger the Alternative Minimum Tax for filers, so it is important to seek qualified tax counsel. Read more

Form 1065

Form 1065 is an IRS form used to report income, gains, losses, deductions and tax credits associated with partnerships. Let's say John Doe and Jane Smith operate a partnership that sells widgets. Read more

Form 1078

Form 1078 is only for people who became resident aliens before 2001. In our example, that means John Doe would've filed a W-9 after 2001. Read more

Form 1098

Form 1098 is an IRS form that reports how much mortgage interest a taxpayer paid during the tax year. Let's say John Doe borrows $100,000 for a house from Bank XYZ. Read more

Form 1099-B

Form 1099-B is useful for reporting and calculating taxes that apply to capital gains. For instance, the form will disclose the proceeds of the sale and how much of those proceeds are capital gains, as well as whether those gains are long-term or short-term in nature (this affects the taxability of the gain). Read more

Form 1099-DIV

Financial institutions must create Form 1099-DIV for dividends and distributions of at least $10 in a tax year. Taxable dividend distributions from life insurance contracts and employee stock ownership plans are not subject to 1099-DIV reporting (they are reported using Form 1099-R). Read more

Form 1099-INT

Interest is taxable income. The Form 1099-INT shows how much interest a person earned from an institution in a tax year. Read more

Form 1099-Misc

According to the IRS, a Form 1099-Misc is appropriate for reporting the following: Payments of $600 or more for services performed for a trade or business by people not treated as its employees (such as subcontractors). Prizes or awards ($600 or more) State and federal tax withheld in conjunction with any of the other activities reportable on the form. Read more

Fortune 100

The Fortune 100 is an annual list of the 100 largest companies in the United States. Fortune magazine publishes the list. Read more

Fortune 1000

The Fortune 1000 is an annual list of the 1,000 largest companies in the United States. Fortune magazine publishes the list. Read more

Fortune 500

The Fortune 500 is an annual list, published by Fortune magazine, of the 500 largest companies by revenue in the United States. Any company that reports financial data to a United States government agency is eligible for consideration in the Fortune 500. Read more

Forward Contract

A forward contract is a private agreement between two parties that simultaneously obligates the buyer to purchase an asset and the seller to sell the asset at a set price at a future point in time.   Unlike futures – which are regulated and monitored by the Commodities Futures Trading Commission (CFTC) –  forward contracts are unregulated. Read more

Forward Dividend Yield

A forward dividend yield is a stock's annualized dividend based on its latest declared dividend payment. Forward dividend yields can be calculated in a number of ways, and depending on which way they are calculated, various sources will often list different yields for the exact same security. Read more

Forward Earnings

Forward earnings are the profits a company (or companies) expect to generate during a future period of time. Companies and/or analysts calculate forward earnings using a variety of techniques that generally involve a review of past earnings performance and market conditions as well as a prognostication about the future direction of the economy and/or stock market. Read more

Forward Price-to-Earnings Ratio (Forward P/E)

The forward price-to-earnings ratio (forward P/E) is a valuation method used to compare a company’s current share price to its expected per-share earnings. The market value per share is the current trading price for one share in a company, a relatively straightforward definition. Read more

Forward Pricing

Forward pricing is the SEC-mandated policy of processing buy and sell orders for open-ended mutual fund shares at the net asset value (NAV) as of the next market close (not the most recent market close).  For example, let's say you place an order today to buy $100 worth of mutual fund XYZ this morning. Read more

Forward Rate

Usually reserved for discussions about Treasuries, the forward rate (also called the forward yield) is the theoretical, expected yield on a bond several months or years from now. The yield curve dictates what today's bond prices are and what today's bond prices should be, but it can also infer what the market believes tomorrow's interest rates will be on Treasuries of varying maturities. Read more

Forward Trading

Forward trading, also called front running, occurs when stockbrokers personally purchase shares of a particular stock while knowing that their firm plans to purchase numerous shares of the same stock. Forward trading is considered unethical and is often illegal. Read more

Foul Weather Fund

A foul weather fund is a mutual fund that outperforms the market during poor market conditions. The goal of the fund is to minimize or benefit from the effects of a downward move in the market. Read more

Free Application for Federal Student Aid (FAFSA)

The free application for federal student aid (FAFSA) is a form filled out by college or graduate students who are eligible for government-sponsored financial aid. Every year, a college or graduate student seeking financial aid must complete the FAFSA form found on the US Department of Education's website, www. Read more

Free Asset Ratio (FAR)

Free asset ratio refers to the net assets of an insurance company as a percentage of its total assets.   Free assets are the same as net assets, that is, assets that are not obligated to insurance policies. Read more

Free Cash Flow (FCF)

Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends, reducing debt, or other purposes. Read more

Free Cash Flow per Share

Free cash flow per share is a measure of how much cash per share a business generates after accounting for capital expenditures like equipment or buildings. Free cash flow is available to be used for expansion, dividends, debt reduction, or other purposes. Read more

Free Cash Flow to the Firm (FCFF)

Free cash flow to the firm (FCFF) is the cash available to pay investors after a company pays its costs of doing business, invests in short-term assets like inventory, and invests in long-term assets like property, plants and equipment. The firm's investors include both bondholders and stockholders. Read more

Free Float

A company's free float refers to the number of outstanding shares that are available to the public for trade. Free float is sometimes referred to as float or public float. Read more

Free Lunch

Free lunch is a phrase used to describe getting something for nothing. There is no such thing as a free lunch. Read more

Free Market

A free market is a type of economy with little to no interference from a central government. Instead, a free market is based on supply (from producers) and demand (from consumers). Read more

Free On Board (FOB)

Free on board (FOB) is a contractual term that refers to the requirement that the seller deliver goods at the seller's cost via a specific route to a destination designated by the buyer. To understand how FOB terms work, let's look at an example. Read more

Frictional Unemployment

Frictional unemployment refers to the portion of the unemployment rate that results from labor market turnovers. This unemployment is ongoing and includes job transitions and communication lags between employers and potential employees, people entering and exiting the labor force and from the constant creation and destruction of jobs. Read more

Front Running

Front running, also called forward trading, occurs when stockbrokers know their firm plans to purchase numerous shares of a particular stock, so they purchase shares of the same stock for themselves. Front running is considered unethical and, many times, is illegal. Read more

Front-End Load

A front-end load is a fee paid to purchase a specific investment. It is expressed as a percentage of the amount invested. Read more

Frontier Market

Frontier market describes up-and-coming economies that tend to be smaller and less developed than emerging markets like China and India. Frontier markets have a poor population willing to work to thrust itself into a middle class and, with luck, they also have access to a deep cache of natural resources and an appetite for export dollars. Read more

Frozen Account

A frozen account refers to a situation where an individual is unable to withdraw money from a bank account due to a court order. A bank account is commonly frozen when the account holder owes money to another party. Read more

Full-Service Broker

A full-service broker executes trades for clients, but also provides research, advice, retirement planning and tax assistance. There are two general categories of brokers: discount and full-service. Read more

Full-Time Student

A full-time student is a person enrolled in a post-secondary institution of learning who is taking at least the minimum number of course credit hours according to the institution's requirements. Although the requirements vary depending on the institution, a full-time student typically takes a certain number of course hours during at least five calendar months of the year. Read more

Fully Depreciated Asset

With a fully depreciated asset, the accumulated depreciation equals the original cost of the asset. Let's assume Company XYZ bought a MegaWidget for $100,000 10 years ago. Read more

Fully Indexed Interest Rate

A fully indexed interest rate equals an adjustable-rate mortgage's (ARM) interest rate benchmark plus a spread.   The interest rate on an ARM corresponds to a specific benchmark (often the prime rate, but sometimes LIBOR, the one-year constant-maturity Treasury, or other benchmarks) plus a spread (also called the margin, and its size is often based on the borrower's credit score). Read more

Fully Vested

A person is fully vested when a financial instrument or account becomes wholly owned by the investor. Let's assume John Doe receives options to buy 2,000 shares of Company XYZ, his employer, for $10 a share. Read more

Fund

Fund usually refers to mutual fund, which is an open-ended investment company that pools investors' money into a fund operated by a portfolio manager. This manager then turns around and invests this large pool of shareholder money in a portfolio of various assets or combinations of assets. Read more

Fund Manager

A fund manager is an investment professional who oversees the investments within a portfolio. A fund manager implements the chosen investment strategy by selecting when to buy or sell the assets held in a portfolio. Read more

Fundamental Analysis

Fundamental analysis attempts to understand and predict the intrinsic value of stocks based on an in-depth analysis of various economic, financial, qualitative, and quantitative factors. Fundamental analysis observes numerous elements that affect stock prices such as sales, price to earnings (P/E) ratio, profits, earnings per share (EPS), as well as macroeconomic and industry specific factors. Read more

Funds from Operations (FFO)

Funds from Operations (FFO) is a measure of cash generated by a real estate investment trust (REIT). It is important to note that FFO is not the same as Cash from Operations, which is a key component of the indirect-method cash flow statement. Read more

Funds from Operations Per Share (FFOPS)

Funds from operations per share (FFOPS) is a measure of cash generated by a real estate investment trust (REIT). It is important to note that FFOPS is not the same as Cash from Operations Per Share, which is a key component of the indirect-method cash flow statement. Read more

Funds Settlement

Funds settlement refers to the transfer of funds from buyer to seller and the transfer of an asset's title from seller to buyer. When an investor sends an order to his or her broker, that trade information is sent to a clearinghouse (for example, the National Securities Clearing Corporation). Read more

Future Value (FV)

Future value (FV) refers to a method of calculating how much the present value (PV) of an asset or cash will be worth at a specific time in the future. One dollar put into a savings account today might be worth more than one dollar a year from now. Read more

Futures

Futures are financial contracts giving the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time. Futures are also called futures contracts. Read more

Futures Commission Merchant (FCM)

A futures commission merchant (FCM) is a company or individual certified to negotiate the sale and purchase of futures contracts, as well as oversee the delivery of underlying commodities to investors. An FCM has to be certified by the Commodity Futures Trading Commission (CFTC) before being allowed to facilitate the purchase and sale of futures contracts on a futures exchange. Read more

Futures Contract

Futures contracts give the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time. The assets often traded in futures contracts include commodities, stocks, and bonds. Read more

Futures Market

Futures markets are places (exchanges) to buy and sell futures contracts. There are several futures exchanges. Read more