Vocabulary - F

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

Word Synonym / Acronym Definition
Face Amount Certificate Company   An Investment Company rarely sold today that issues debt certificates at a predetermined rate of interest to be redeemed on a specified date in the future.
Fallen Angels   A bond issue that has a rating of investment grade, but is later lowered to junk bond status.
Family Limited Partnership   A type of limited partnership used as a means of minimizing estate and gift taxes
Federal National Mortgage Association FNMA or Fannie Mae A government agency that issues mortgaged backed securities
Federal Home Loan Mortgage Corporation FHLMC or Freddie Mac A government agency that issues mortgaged backed securities
Fee-based   A type of compensation in the financial services industry whereby advice is based on an horly rate, a flat fee for service, or a percentage of assets managed (often 1-2% annually). Advisors are registered under the Investment Advisors Act of 1940 unlike broker/dealers (See "Merrill Rule"). Investment Advisors are also held to a higher standard known as "Fiduciary." Advice must me in the clients best interest not merely "suitable." Considered by most as the best method for unbiased advisement since there is no additional benefit for recommending certain products.
Fiduciary   A person who is held to the highest standard of law for acting on behalf of or for the benefit of someone else. A fiduciary often has discretionary authority. Advice must always be in the "Best Interest" of the individual.
Filing Date   The day that a company's registration statement is received by the SEC.
Financial Planner   An IAR that provides guidance to his clients on stategies to meet investment and other financial objectives, usually in the form of a written document.
Fixed Assets   Items used by a company in its day to day operations to create products of provide services.
Floating Rate Bond (Floater, Floating Rate Note (FRN), Adjustable Rate Note) Variable-rate Bond or Variable Rate Note A bond whose Coupon Rate flucuates typically tied to an idex.
Floor   A minimum interest rate a bond will pay, regardless of how low the relevant index falls.
Floor Brokers   Brokers who handle mainly large orders (10,000 shares or more) placed by institutional clients.
Forced Conversion   Most convertible securities are callable and the redemtion price of the bonds may be less than the conversion value. In such a case most investors would choose to convert their security immediately to common stock rather than receive the lesser redemtion price.
Foreign Pay Bonds   International bonds that pay interest and principal in a foreign currency.
Form ADV   An application with the SEC for registration as an investment advisor having two parts know as the ADV Part I and the ADV Part II.
Form ADV Part I   The first part of the form ADV which discloses specific information of interest to regulators
Form ADV Part II Brochure Rule The second part of the form ADV which acts as a disclosure document to clients and may be used to satisfy the Brochure Rule.
Forward Contract Forward A futures contract that is NOT transferable to other parties without permission.
Front-end Load   A sales charge that is taken immediately from the intial investment amount leaving less to actually be invested.
Frontrunning   An advisor who places an order for the firm's proprietary account ahead of a large client order in hope that the client order will change the market.
Fulcrum Fee   Compensation of an investment advisor with the potential for additional compensation for superior performance or reduced compensation for inferior performance as compared to an index. Only allowed with clients who are 1) registered investment companies 2) a person with an account in excess of $1 million who is not a trust or part of a government plan 3) Nonresidents of the U.S. 4) fall under the 3(c)(7) Funds rule or 5) are "Qualified" Clients.
Fundamental Analyst   An securities analyst who focuses on company performance determining buy/sell recommendations.
Fungible   Easily interchangeable
Future Value   Determining the value of an investment in the future based on a certain period of time and compounding effect. (Future Value) = (Present Value)(1+r) n .
Futures Contract   An agreement similar to an option to buy or sell a specific amount of a commodity or a financial instrument, at a particular price, but on a stipulated date.

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