Financial Dictionary

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Face Amount Certificate

A debt security issued by Face Amount Security Company, which is a mutual fund. These securities are backed by security interest on real estate or other securities in company’s possession. Face Amount Certificate Company pays to investors a fixed amount of interest annually and the principal, the face value, at termination date.

Face Value

The debt (or loan) amount that appears on the face of the certificate and that the issuer must pay at maturity.

Factor

A decimal between 0 and 1 that represents the amount of mortgages remaining in a pool of mortgage-backed securities.

Factor Book

A tabular presentation that shows relevant information about factors, value of remaining mortgages, and interest rates on mortgage-backed securities.

Factor Table

A table used to compute the outstanding principal on Pass-Throughs — Ginnie Maes, Freddie Macs and Fannie Maes.

Factoring

A way of financing. In the case of factoring, company sells its accounts receivable to the financial institution, the factor. The factor institution considers the risk of receivable accounts and the age of accounts, paying the company reduced value of original receivable. Factoring is a good way for company to free up its capital, focus […]

Fakeout

A technical analysis term that describes a situation in which investors enter the position in hope of future positive price movement, but that movement never comes. Instead, asset moves in the opposite direction. Because of fakeouts, investors should never rely to only one indicator when making investment decisions. Experienced investors usually seek four or more […]

Fallen Angel

A bond which was investment-grade on the date of the issuance, but is now considered a junk bond with low quality status. This also refers to a stock with a price substantially lower than its all time highs.

Falling Knife

A term used to describe a stock with a rapidly declining (falling) price in a short period of time. It is important to proceed with caution in the event of discovering a stock that could be considered as a falling knife. Buying such a stock can be very risky as they price could continue to […]

Fannie Mae – Federal National Mortgage Association

A government-sponsored enterprise (GSE) that was created in 1938 to expand the flow of mortgage money by creating a secondary mortgage market. Fannie Mae is a publicly traded company which operates under a congressional charter that directs Fannie Mae to channel its efforts into increasing the availability and affordability of homeownership for low-, moderate- and […]

Farmland

The appeal of investing in farmland has grown tremendously over the past few years and the investment thesis for this asset class is fairly straightforward: farmland prices, both at home and abroad, have appreciated greatly in recent years as agribusiness has expanded tremendously to meet the needs of an ever-increasing world population.

FDIC (Federal Deposit Insurance Corporation)

Founded in 1933, with a mission of insuring the deposits against bank failure and improve public confidence in the in the U.S. financial system. FDIC will insure all deposits up to $100.000 if the bank or financial institution is a FDIC member.

Fed Bias

This the way the Federal Open Market Committee announces its perspective on the current state of inflation in the economy. Fed bias is a statement that indicates how the Fed is leaning in terms of its next interest-rate move.

Federal Debt

The amount by which government’s expenditures exceeds its revenues, the total amount of money that the U.S. owes to the creditors. All individuals, business and governments and other organizations which holds the government bonds are considered creditors.

Federal Funds Rate

The interest rate charged by banks with excess reserves at a Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. The most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the prime rate and the discount rate, which are periodically changed by […]

Federal Reserve System

The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States.

Fibonacci Numbers

A creation of the Italian mathematician Leonardo Fibonacci who lived in 12th century. His numbers are a sequence of numbers in which every following number is the sum of two preceding numbers. If starting from 1, line would look like: 1, 1, 2, 3, 5, 8, 13, 21…etc. In this line, every number is about […]

Fidelity Bond

A bond which serves to protect employers against loss that can develop from employee dishonesty. It is often required for insurance and security companies to possess Fidelity Bonds.

Fiduciary

A corporation or individual legally authorized to hold assets in the name and on behalf of other party. Fiduciaries are obligated to act in the best interest of the person whose assets they are in charge of.

FIFO (First in First Out)

An asset management method for sold or used assets. FIFO implies that assets which were produced or bought firs, is used or sold first.

Fill

The basic action when trading any type of securities. It represents completing an order. For example, if trader places a sell order at $100 and the buyers agrees with the price and buys the security, it is said that the order is filled. Price of $100 is called execution price or fill price.

Fill or Kill

An order to a broker to fill the transaction immediately and completely or to cancel it totally if possible. Fill or Kill order is rarely used in practice, but when utilized, it is mostly for buying or selling large quantity of shares.

Final Prospectus

A legal document with information about new security issue. It contains information about the price, delivery date and financial info about the issuer. The Final Prospectus must be given to every new buyer of an issued security.

Financial Accounting Standards Board (FASB)

An independent board consisting of 7 accounting professionals who establish standards of financial accounting. These standards are called GAAP (Generally Accepted Accounting Principles). Also, a mission of the FASB includes education of issuers, auditors, and users of financial information. FASB serves the investing public through transparent information resulting from high quality financial reporting standards.