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A-B-C-D-E-F-G-H-I-JK-L-M-N-O-P-Q-R-S-T-U-V-W-XYZ

Specialized Glossaries:


Mortgage / Real Estate
Life Insurance
Estate Planning

Retirement / RSP / RIF
Mutual Funds
Credit / Financing

Abbreviations / Acronyms

Definitions – F
   

Face Value:

The stated nominal value of a security, so called because it is usually the value printed on the face of the legal certificate.

   
Factoring: A type of financial service thereby a corporation sells of transfers title of its accounts receivable to factoring company normally at a discount which then acts as the principal owner of the recallable not as an agent.
   

Fair Market Value:

The price a willing buyer would pay a willing seller if neither was under any compulsion to buy or sell. The standard at which property is valued for deemed disposition.

   

Family Trust:

An inter vivos trust established with family members as beneficiaries:

   

Fed (The):

A slang expression referring to the U.S. Federal Reserve Bank.

 

Federal Reserve:

The central bank of the United States. See also central bank.

   

Fiduciary:

An individual or institution occupying a position of trust. An executor, administrator or trustee. Hence, "fiduciary" duties.

   

Finance Canada:

Federal department responsible for Canada's economic performance and regulation of financial institutions.

   

Financial Instrument:

A general term for stocks, bonds, money market paper and currencies.

   

Financial Intermediaries:

Corporations that receive savings and investment funds from individuals and invest them in capital market securities. Examples would include chartered banks, trust companies, life insurance companies, mutual funds, and pension funds.

   

Financial Margin:

Interest income earned on loans and investments less interest paid on deposits and other financing costs.

   

Financial Planner:

A person who helps you plan and carry out your financial future.

 

Financial Statements:

A set of records summarizing the financial state of affairs of a corporation. Usually produced for shareholders and investors.

   

First Mortgage:

The mortgage agreement which has first claim on the asset in the event of default.

   

First Mortgage Bonds:

Bonds issued by a corporation that are backed by the first claim on the proceeds from the sale of a specific asset or set of assets in the event that the company is liquidated.

   

Fiscal Agent:

A company or individual empowered to act on behalf of a corporation or government in arranging its financial affairs.

   

Fiscal Drag:

A term used to describe a climate where there is little government spending to encourage growth in an economy. Usually occurs as a result of high deficits that require a reduction in government spending.

   

Fiscal Policy:

The policy pursued by government to manage the economy through its spending and taxation powers.

   

Fixed Assets:

Assets of a long-term nature, such as land and buildings

 

Fixed Income Fund:

A fund whose assets are invested in preferred shares, bonds and mortgages.

   

Fixed Income Investments:

Investments that generate a fixed amount of income that does not vary over the life of the investment.

   

Fixed Liability:

Any corporate liability that will not mature within the following fiscal period. Foe example, long-term mortgages or outstanding bonds.

   

Fixed-Period Withdrawal Plan:

A plan though which the mutual fund investor's holdings are fully depleted through regular withdrawals over a set period of time. A specific amount of capital, together with accrued income, is systematically exhausted.

   

Fixed-Rate Mortgage:

A mortgage loan for which the rate of interest is fixed for a specific period of time (the term).

   

Fixed Term - Annuities:

Fixed Term Life Annuity: An annuity under which payments are guaranteed for the life of the annuitant.

A series of regular periodic payments comprising principal and interest. An annuity is a contract providing for a series of payments. In the case of retirement, an annuity is usually purchased from an insurance company who then pays the purchaser a monthly amount while still alive. Annuities may have more complicated features such as indexing, guarantee periods and benefits payable to a spouse or other beneficiary after death.

 

Fixings (gold):

In the London Bullion market, the price at which dealers transact gold and silver with each other is fixed. In case of gold, the market participants get together twice every day for a "fixing", while similar procedure takes place one a day for silver. The London fixing are quoted and observed around the world as important indicators of the market trend.

   

Flat:

"Being flat", or "Flat position" refer to a trader's net position in a commodity, meaning that his books show no holdings or liabilities.

   

Floating-Rate Note/Interest:

A note that pays an interest rate tied to current money market rates. The holder may have the right to demand redemption at par on specified dates. Floating interest Rate, is a rate that fluctuates with general market conditions

   

Flow Through Shares:

A share that entitles its owner to clam certain deductions or credits that would otherwise only be available to the company. These deductions or credits are “flowed through” to the investors, as if the investor had directly been involved in specific company activities. These shares make sense where the investor will realize a larger benefit from the deduction and credits than the company would.

   

Fluctuation:

A variation in the market price of a security.

   

Fool's Gold:

Iron pyrite is often mistaken for gold. The qualities of gold and iron pyrite are quite different: real gold is soft and malleable, the false version is hard and brittle.

 

Foreign Exchange Forward Contracts:

A contract to buy or sell a fixed amount of foreign currency on a specified date at a set rate of exchange.

   

Foreign Exchange Rate:

The price at which one currency trades for another.

   

Foreign Exchange Risk:

The risk that a long or short position in a foreign currency might, due to an adverse movement in the relevant exchange rate, have to be closed out at a loss. The long or short position may arise out of a financial or commercial transaction.

 

Foreign Investments:

These (RRSP) type investments can be in the form of stocks and/or bonds of non-Canadian companies.

 

Foreclosure:

A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.

   

Forward Rate Agreements:

A contract for payment or receipt of interest on a specified principal to be settled at a future date. The settlement amount is the difference between the contracted rate of interest and the market rate.

   
   

Forward Starting Swaps:

See derivatives (swaps).

 

Four Nines:

The finest gold bullion or gold coinage available is the gold with a fineness of .9999, or as the experts call it. "Four nine fine gold".

   

Four Pillars:

A term used to describe the main types of financial institutions: banking, trust, insurance and securities.

   

Free Floating Currency:

A currency that is valued in open markets based on the country's economic and political outlook, rather than being fixed or tied to any other currency.

   
Front-end Fees: Fee that are charged to arrange a loan or other financial arrangements.
   

Front-end Load:

A sales charge levied on the purchase of mutual fund units.

   

Full-Service Brokerage:

Full-service brokerage is the most traditional type of brokerage. It offers advice on building portfolios, on the types of securities to buy and sell, and asset allocation. In general, full-service brokerages charge higher commissions in exchange for this advice.

   

Fundamental Analysis:

A method of evaluating the future prospects of a company by analyzing its financial statements. It may also involve interviewing the management of the company.

 

Fund Manager:

A person who manages the assets of an invest.

   

Funds Under Administration:

The deposits and loans administered or held by an Financial Institution.

   

Futures:

A contract traded on a recognized exchange in which the seller agrees to deliver a specified commodity or financial instrument at a future date at a specified settlement price. A risk in the futures market is that the seller must pay the price of the underlying security on settlement date, which may be substantially greater than the price on the date on which the contract was sold.

Futures are traded on a wide range of farm products, all the basic industrial metals, financial markets indexes and on several common interest-sensitive instruments, such as benchmark bonds, bankers acceptances notes and treasury bills.

   

Futures Contract:

A agreement to buy or sell an asset at a specified price an a specified date

   

Futures Market:

A market in which contracts for future delivery of a commodity or a security are bought and sold.

   

Futures Options:

Options on futures contracts for commodities, currencies, stock indexes and other instruments ate listed on North American commodities exchanges.

 

Future Value:

The amount of to which a series of payments will accumulate towards a future date, or if compounding with an positive/discount interest factor. (See "compound interest and market value adjustment".)

This Glossary of financial terms was created by Fiscal Agents Financial Information Services, Research Department. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording, or otherwise, without the prior written permission of Fiscal Agents. Copyright Fiscal Agents © 2000. All Worldwide Rights Reserved. Click to contact Glossary editor or see the permissions page.





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