The Most Comprehensive Financial Dictionary with over 1000 Financial Terms Explained - Clear and Concise Article Style Description with Practical Examples
Financial Words Starting with F 2017-08-15T10:45:29+00:00
Face Value
Face Value represents the dollar value of a given security as the issuer states it officially. It is also otherwise known as the nominal value. Where stocks are concerned, this is the certificate-displayed original value of the stock. With bonds, this amounts to the dollar amount which will be paid back to the bond holder when the bond matures. This [...]
Factoring
Factoring refers to a financial transaction which is considered to be debtor finance. In such an arrangement, companies actually sell off their invoices or accounts receivable to a third party factor for a discount. There is a major reason why a company would be interested in doing this. They may require cash for immediate needs which cannot wait for the [...]
Fair Credit Billing Act
Congress passed the Fair Credit Billing act back in 1975. They enacted this national law in order to safeguard consumers from unfair or prejudiced billing actions. It created mechanisms for dealing with billing errors that affect credit accounts which are open ended. This includes credit cards and charge card accounts. There are many different and all too common types of [...]
Fair Housing Act
The Fair Housing Act of 1968 is officially known as Title VIII from the Civil Rights Act of 1968. It makes it illegal to discriminate with regards to renting, selling, or financing homes or apartments. No one may consider color, race, sex, religion, or national origin in these activities. Congress amended the Fair Housing Act of 1968 with the Fair [...]
Fair Isaac Corporation
Fair Isaac Corporation refers to the FICO company which trades on New York Stock Exchange under the legendary ticker FICO. The Fair Isaac Corporation proves to be a world leading analytics software firm. They assist businesses in over 90 countries in making better-informed decisions which improve profitability, growth, and client satisfaction. The firm pioneered Big Data and complex mathematical algorithms [...]
Fannie Mae
Fannie Mae is the acronym for the FNMA Federal National Mortgage Association. This entity is a GSE Government Sponsored Enterprise along with brother organization Freddie Mac. It became a publicly traded company in 1968. This home lending giant proves to be the largest mortgage financing provider anywhere in the United States. As such, it funds significantly more mortgages than any [...]
Fed Funds Rate
Fed Funds Rate refers to the most key interest rate benchmark in the United States. Such a benchmark rate is the one which the banks charge one another in order to borrow money from each other overnight. The Federal Reserve similarly deploys this rate as a tool in order to meaningfully impact monetary policy within the country. This is not [...]
Federal Debt
The federal debt is also known as the national debt. This represents the entire dollar value of the money which the U.S. federal government has borrowed from its various creditors over the years. Creditors to the government are made up of all governments, businesses, individuals, and other national and international entities which own the debt instruments of the U.S. government. [...]
Federal Deposit Insurance Corporation (FDIC)
The U.S. government started The Federal Deposit Insurance Corporation back in 1933. They created it because of the literally thousands of failed banks that went down in the 1920s and 1930s. The FDIC began insuring bank accounts at the beginning of 1934. Since then, no depositors have lost any insured bank account money despite a consistent number of banks failing [...]
Federal Funds
Federal Funds refers to the excess reserves which financial institutions such as commercial banks choose to deposit with their regional Federal Reserve Bank. These are also often called Fed Funds. Such funds may be lent out to other participants in the market who lack enough immediate cash on hand to cover their own mandatory minimum reserves and lending opportunities. Such [...]
Federal Housing Finance Agency (FHFA)
The Federal Housing Finance Agency is a government regulating agency. They are independent and responsible for overseeing several agencies within the secondary mortgage market. These include Freddie Mac, Fannie Mae, and the Federal Home Loan Banks. They work to keep these critical government sponsored organizations, along with the entire American housing financial system, in good health. As such, the FHFA [...]
Federal Open Market Committee
The Federal Open Market Committee is a group within the Federal Reserve, the central bank for the United States. This central bank is more commonly known as the Fed. They carry out actions of monetary policy. This impacts the cost and readily available quantity of money and credit. The Fed uses these tools to foster the country’s economic goals. Thanks [...]
Federal Reserve
The Federal Reserve, also known as the Fed, or the Federal Reserve Board, proves to be the United States’ central banking system. This central bank came about in 1913 as a result of Congress passing the Federal Reserve Act. Congress created the organization because of a number of serious financial panics that culminated in the severe panic of 1907. With [...]
Federal Reserve Act of 1913
The Federal Reserve Act of 1913 created the Federal Reserve Bank. This proved to be the Act of Congress that set up the Federal Reserve System. This system became the Central Bank organization for the United States. As part of the act, the Federal Reserve acquired the powers to issue the nation’s legal tender currency. President Woodrow Wilson actually signed [...]
Federal Reserve Bank
Twelve different Federal Reserve Banks make up the Federal Reserve System that functions as the central bank for the U.S. Federal reserve banks are also utilized to sub-divide up the country into the twelve Federal Reserve Districts. Every Federal Reserve Bank bears the responsibility for individually regulating the various commercial banks that are found in such a bank’s geographical district. [...]
Federal Reserve Bank Notes
Federal Reserve Bank Notes were the bank notes in the United States that were issued from 1915 to 1934. They are legal tender and acceptable in transactions in the United States. They exist alongside other historical anomalies of American paper notes, including U.S. silver certificates, United States Notes, National Bank Notes, Gold Certificates, and Federal Reserve Notes. Federal Reserve Bank [...]
Federal Reserve System
The Federal Reserve System is the United States’ central banking system. It is made up of the Federal Open Market Committee, the Federal Reserve Board, 12 regional Federal Reserve Banks, and state and national member banks. Seven members make up the Board of Governors. These the President appoints to 14 year terms upon approval by the Senate.  The reason this [...]
Federal Trade Commission (FTC)
The FTC Federal Trade Commission proves to be the agency responsible for protecting the American consumers. They strive to stop tricky, fraudulent, and unfair practices in business in the nation’s marketplaces. They also disburse valuable information to consumers that helps them to recognize, stop, and sidestep these frauds. The FTC accepts consumer complaints by phone, email, their website, and through [...]
Fedwire
Fedwire represents an RTGS, or real time gross settlement system. This settling system pertains to central and commercial bank funds which are utilized within the United States. The Federal Reserve Banks employ it to electronically settle all of their final payments between the various member institutions. All final payment settlement is performed exclusively within U.S. dollars. Fedwire is actually operated [...]
Fiat Dollars
Fiat dollars refer to dollars that do not possess any sort of intrinsic value. They are not backed up by gold or any other tangible asset, only by the full faith and trust in the United States government. Since the United States abandoned the venerable and stable gold standard back in 1971, the U.S. currency has been one of only [...]
Fiat Money
Fiat Money proves to be money that has no real intrinsic, or actual, value. It instead derives its worth from governments accepting it as legal tender. The concept of fiat money on a large scale is a relatively new one. Throughout practically all of history, the majority of currencies around the world derived their value from silver or gold. Fiat [...]
FICO Score
FICO Score refers to the overwhelmingly most popular and heavily utilized credit score in the United States. The company which created, owns, and manages it to this day is Fair Isaac Corporation. Financial institutions that loan out money employ this FICO score for an individual to assess any credit risk and decide whether or not they will offer the person [...]
Fiduciary
A fiduciary is an organization or individual which owes its trust and good faith to another person or group. It means that one party takes on the most serious legal responsibility to the other party. Fiduciaries are ethically and legally required to carry out their activities in the best interest of the other person or organization. This could involve another’s [...]
Finance Controller
A Finance Controller turns out to be an employee who carries the responsibility for the higher level accounting, financial activities, and managerial accounting for a given firm. Such an employee will usually report to his or her supervisor the company CFO Chief Financial Officer. In smaller corporations and companies, the two positions may be one and the same. There are [...]
Financial Analyst
A Financial Analyst refers to a salaried individual who handles analysis, financial planning, and projection for both corporations and smaller companies. These accounting field experts create future forecasts for expenditures and revenues in order to come up with projected costs and capital budgeting for company projects. Those analysts who are senior level have the opportunity to work with executives in [...]
Financial Contagion
Financial contagion generally refers to the transferable characteristics of the shock of one nation’s asset market to translate to asset prices in a different (but at least somewhat related) independent nation’s financial markets. It is important to realize that this is possible at all because of several different kinds of shocks. Among the most accepted, important, and common of these [...]
Financial Crisis
A financial crisis refers to a period where the value of assets and/or financial institutions declines quickly. Such a crisis is commonly connected with runs on the banks or at the least fear and panic. In these difficult and dangerous economic periods, investors will fire sell any assets they can to pull back their cash out of investment and savings [...]
Financial Forecasting
Financial Forecasting refers to the corporate or government fiscal management tool for delivering information based on estimates from past, present, and anticipated future financial conditions of a firm or national government finances. It is extremely useful in projecting future revenue streams or expenditures. These can create a longer term or short term impact on corporate or government goals, policies, spending, [...]
Financial Industry Regulatory Authority (FINRA)
The Financial Industry Regulatory Authority is a congressionally authorized independent and non profit outfit. Congress established them to safeguard the investors of America by ensuring that the stock market industry runs honestly and fairly for all participants. FINRA is not an agency of the government, even though they have broad disciplinary and enforcement powers. The organization tirelessly works to ensure [...]
Financial Mentor
A financial mentor is a trusted guide or counselor that helps a person in the arena of business, personal finance and investments. Mentors can be many different people, but they typically have several characteristics in common. They are all loyal advisers who have the person’s best interests at heart. Mentoring is most widely used in business. Other settings that use [...]
Financial Stability Oversight Council
The Financial Stability Oversight Council is an organization that was created by the Dodd-Frank Act following the financial crisis of 2008. It possesses a clear legal mandate that provides an accountability to look for risks and respond to perceived upcoming threats to the United States’ financial stability. This is the first time that a single organization has held such important [...]
Financial Statement
Financial statements are official records of a business’ or personal financial activity. With businesses, financial statements present any and all pertinent financial activity as usable information. They do this in a clear, organized, and simple to comprehend way. Financial statements are commonly comprised of four different types of financial accounts that come with an analysis and discussion provided by the [...]
Financial Times Stock Exchange (FTSE)
The Financial Times Stock Exchange represents an enormous group of indices owned by the London Stock Exchange. The acronym originated in the days when it was half owned by the Financial Times newspaper and the LSE. Now this group is an entirely owned subsidiary of only the London Stock Exchange. When individuals use the word FTSE, they are most commonly [...]
Financing Terms
There are two different financing terms available for businesses. These are short term financing and long term financing. In today’s economic environment following the financial collapse and Great Recession, many businesses require both types. The two types of financing involve more differences than only the time frames. Short term financing is commonly utilized for the daily business operations’ funding and [...]
Fire Sale
A fire sale is a phrase with a variety of interesting meanings. The term originated in reference to the reduced sales price for goods which were damaged in a fire of a shop or business. Since then, it has come to refer to any event which forces a business to move its assets or inventory goods for prices that are [...]
Fiscal Policy
Fiscal policy is a government policy for managing the economy. In these actions, a government changes its tax rates and spending amounts. They do this to influence the national economy in a certain way. Fiscal policy’s sister strategy is called monetary policy. In this complementary series of government actions the central bank adjusts the country’s money supply. They do this [...]
Fiscal Year
The fiscal year refers to an accounting period which governments or companies choose to use for their own accounting and in developing financial statements. Fiscal years are not necessarily the same as the calendar years. The U.S. government employs a different starting and finishing point for its own fiscal year. The IRS Internal Revenue Service permits companies to choose whether [...]
Fitch Group
The Fitch Group is the parent of four subsidiary companies. The original composite member of the group is Fitch Ratings. As the smallest of the Big Three agencies for credit ratings, Fitch has larger, more pervasive rivals in Standard & Poor’s and Moody’s. The United States SEC Securities and Exchange Commission set out its list of the three nationally accepted [...]
Five Year Plans
Five year plans are economic and social roadmaps that China began issuing in 1953. These were based upon the old Soviet central planning procedures. The Soviet Union collapsed in the early 1990s. Its plans are now a historical footnote. China continues to implement these plans every five years like a clock. They consistently show the world what China is attempting [...]
Fixed Annuity
A Fixed Annuity refers to a particular form of annuity contract. Insurance companies make such contracts with individuals who are mostly saving for retirement or estate planning. Two main types of these annuities exist, variable and fixed annuities. The fixed one permits investors to add money to the account which is tax deferred. The investor furnishes a lump sum of [...]
Fixed Assets
Fixed Assets refers to tangible property which are longer term holdings by their very nature. Companies and corporations both own and utilize them in their normal everyday business operations to produce their revenues and profits. They do not typically become converted back to cash or consumed any quicker than in under minimally a year time frame. Many corporations refer to [...]
Fixed Income
Fixed Income refers to the kind of budgeting and investing style that delivers periodic income and actual returns back to the owners of the investments. This income goes out in generally predictable amounts in frequent and anticipated intervals. The investors who flock to fixed income investments are usually retirees. They count on such periodic returns from investments to give them [...]
Fixed Income Markets
The Fixed Income Market refers to the bond market. This market is actually over twice the size of the better known (and more popular with investors) equity stock markets. The truth remains that it is mostly less well publicized by the media or followed and comprehended by the overall investing public. In fact equities differ from fixed income in many [...]
Fixed Rate Mortgage
Fixed Rate Mortgages are products for mortgage loans that the FHA, or Federal Housing Administration, first created. In this type of mortgage, the interest rates in effect on the mortgage note stay at the same level during the entire life of the loan. This stands in stark contrast to loans where the interest rates are adjustable, or floating. There are [...]
Fixer-Upper
Fixer-Upper is a term that is commonly associated with real estate property, such as houses, that need some significant repair and renovation work. Although these kinds of houses might be lived in despite their present condition, they usually want redesign, reconstruction, or redecoration of some form. Depending on how much repair or renovation work they require, fixer-upper’s can be major [...]
Flash Crash
The Flash Crash has also been called the 2010 Flash Crash and the Crash of 2:45. It occurred on May 6 in 2010. This stock market collapse occurred in the United States and caused a trillion dollars of equity to be temporarily wiped out. It began officially at 2:32 EST. The crash happened over only the next 36 minutes. During [...]
Floating Exchange Rate
A floating exchange rate is one where the price of the currency in question is set by the free forex market. This market sets the values of currencies using available supply and relevant demand as measured against other currency pairs. This is the opposite of a fixed exchange rate, where a national government mainly or entirely sets the rate for [...]
Follow-On Public Offer (FPO)
A Follow-On Public Offer is also known by its official acronym FPO. This occurs when a public company which is already listed on a stock market exchange issues additional shares to investors. Such FPOs are useful and practical for those firms which wish to raise extra equity capital from the capital markets via stock issues. These methods are popular with [...]
Forbearance
Forbearance refers to a debt default solution mostly utilized for student loan borrowers who cannot make consistent payments every month on their student loans. In some cases, a borrower may be able to qualify for a forbearance, or otherwise a deferment, on the federal student loans. This would help the borrower to postpone entirely (on a temporary basis) or even [...]
Forbes
Forbes refers to the legendary American business magazine started a century ago. The high level advice magazine beloved by high net worth and ultra-high net worth individuals and business executives has been published bi-weekly all this time. It includes significant and well-regarded articles on industry, finance, marketing, and investing. They also do reports on relevant finance- and investment-related topics including [...]
Forced Liquidation
Forced liquidation involves a business or other organization selling its securities or assets in order to produce liquidity because of a deteriorating financial position and scenario. It is also referred to as forced selling. This activity is commonly pursued involuntarily, as a response to a series of economic or financially devastating events, business regulations, or court imposed legal orders. Where [...]
Foreclosure
Foreclosures represent houses or commercial properties that have been seized by a bank or other mortgage lender. These properties are then sold to recoup mortgage loan losses after an owner and borrower has not made the payments as promised in the mortgage agreement. Foreclosure is also the legal procedure in which the lender gets a court order for the termination [...]
Foreign Account Tax Compliance Act (FACTA)
Foreign Account Tax Compliance Act (FACTA) proves to be an American-issued and -rigorously enforced law. It requires all United States’ citizens living either stateside or overseas to make annual report filings of any foreign bank account holdings they possess. This FACTA law came into effect back in 2010 along with the HIRE Act. The goal ostensibly was to encourage and [...]
Foreign Exchange
Foreign exchange involves converting the currency of one nation into another nation’s currency. Foreign exchange rates can be set in several different ways determined by the country’s government. Free market economies allow their currency to float freely most of the time. The value of the money is determined by the markets according to supply and demand factors. Other nations choose [...]
Foreign Exchange Reserves
Foreign exchange reserves are comprised of any currency which is foreign to the central bank holding it. If the American Federal Reserve held British pounds, this would be an example of such reserves. These exchange reserves can include bank deposits, foreign banknotes, bonds, treasury bills, and various other kinds of government securities. The phrase also includes IMF SDR special drawing [...]
FOREX Markets
FOREX markets are the world wide foreign exchange markets. They are called FX markets as well. FOREX markets are different from all of the other major financial markets in that they are over the counter and decentralized. They exist for the purpose of trading currencies. Unlike with other markets, the FOREX markets are also open twenty-four hours a day during [...]
Fortis
Fortis refers to the now defunct Belgian-based multinational financial giant that had huge presences in insurance, investment and asset management, and traditional and private banking around Europe and beyond it internationally. Up to the year 2007, the jointly Brussels- and Utrecht-headquartered company continued to grow and prosper with massive operations placing it in the slot of twentieth biggest company in [...]
Fortune 500
Fortune Magazine publishes a famous annual list of the biggest 500 companies throughout the United States. This list has become known as the Fortune 500. The positions in the list are based upon total revenues earned for the given year. The magazine’s editors compile this list from the most current revenue figures. They consider both private and public companies. For [...]
Fractional Banking System
The fractional banking system is also known as the fractional reserve banking system. This system is the way that virtually all modern day banks around the world operate. In a fractional reserve banking system, banks actually only maintain a small amount of their deposited funds in reserve forms of cash and other easily liquid assets. The rest of the deposits [...]
Franchise
A franchise can be defined in many ways. The definition from the International Franchise Association describes franchising as a means to expand a business so that goods and services can be distributed more effectively via a licensing relationship. The word itself legally means a specific kind of license. Ultimately, franchising refers to the personal relationship which a franchisor maintains with [...]
Franchise Model
Franchises are businesses where the owners sell the rights of their business to third parties. The owners of the franchise are known as franchisors. The third party operators who buy the rights are called franchisees. The franchise model is the precise way the business is run to insure uniformity among the different regional or national franchise outlets. This model of [...]
Fraud
Fraud turns out to be an intentional misstating or misrepresentation that leads businesses or individuals to encounter harm. These damages are frequently reflected as monetary loss. Several elements must be involved for acts to be considered fraudulent. A number of different kinds of fraudulent activities exist. They range from insurance fraud to identity theft to supplying false tax information to [...]
Freddie Mac
Freddie Mac is a semi-private company that Congress chartered in 1970. They created the entity to offer stability, liquidity, and affordable prices for the country and its housing markets. They have grown to be responsible for the home purchases of one out of four buyers. Besides this the company is also among the biggest financing sources for multifamily housing in [...]
Free Enterprise System
Free enterprise systems are those which have limited government interference in the overall economy. Governments do not place many restrictions on the economic activity and commercial abilities of their citizens in this system. Ownership and business activities are not heavily regulated by the government. Other names for this system are capitalism or free market economies. In such economic systems, individuals [...]
Free Market
Free Market is the term that refers to a system of exchange and trading that takes place voluntarily in a given economic jurisdiction. These markets have the characteristics of decentralization and spontaneous arrangements whereby the people involved are able to make real economic choices with their money. No country in the world has a completely free market. The degree of [...]
Free Trade
Free Trade refers to an economic policy of one or more participating nations. In such a policy, the trade departments or ministries do not discriminate against any of the exports to or imports from a foreign country or territory. This means that both the sellers and buyers of different economies can voluntarily choose to trade without having any government interference [...]
Friedrich Hayek
Friedrich Hayek was a renowned Austrian economist born in Vienna in 1899. He earned significant fame for an impressive variety of contributions in such diverse fields as economics, psychology, and political philosophy. His economic ideas came from the Austrian School in economics. They focused on the fact that knowledge is limited in nature. Hayek became especially famous for defending free [...]
FTSE 100 Index
The FTSE 100 Index proves to be the trading world designation for the largest index managed by the FTSE Group out of London in the United Kingdom. FTSE is actually jointly owned by parent companies the Financial Times and the London Stock Exchange. This mash up of FT from Financial Times and SE from London Stock Exchange is how they [...]
FTSE 250
FTSE 250 is a broad-based stock index maintained by the FTSE company. This company is much like Standard and Poor’s in that they both concentrate their efforts on calculating indices. The FTSE is not made up of any stock exchange, though among its co-owners is the famed and historic London Stock Exchange (LSE). The other co-owner of the company is [...]
Fund Manager
Fund managers are the individuals, investment companies, or sometimes banks that handle a mutual fund’s investment decisions. These decision makers are charged with earning as much profit for their fund as they reasonably can while still following the risk parameters that the mutual fund discloses. Fund managers are compensated differently than stock brokers who earn commissions. These managers receive their [...]
Fundamental Analysis
Fundamental analysis is a method for evaluating stocks and other instruments to learn the value of the shares based on two ideas. These are the factors that impact the actual business of a company in the here and now as well as its prospects for the future. Fundamental analysts most commonly consider individual stocks, but they can also use the [...]
Future Value
Future Value refers to a current asset’s anticipated value at a given specific date of the future. Such a forecast will be dependent on the rate of growth rate that the company assumes over time. As an example, a company may assume a certain guaranteed rate of growth. This would allow them to state that a $10,000 investment they make [...]
Futures
Futures prove to be financial derivatives that are also called forward contracts. Such a futures contract gives a seller the obligation to deliver an asset, such as a commodity, to the buyer at a pre set date. These contracts are heavily traded on major produced commodities like wheat, gold, oil, coffee, and sugar. They also exist for underlying financial instruments [...]
Futures Contracts
Futures contracts are legally binding agreements which two parties usually enter into on a futures exchange trading floor or electronic platform. They spell out the particulars for selling or buying specific financial instruments or commodities for a pre-set price at an exact moment in the future. Such contracts have become standardized to make it easy to trade them on the [...]
Futures Exchange
A futures exchange refers to a central clearing marketplace that allows for futures contracts as well as options on such futures contracts to be traded. Thanks to the rapid increase in electronic trading of futures, this term also finds use regarding futures trading activities directly. There are the two most important futures exchanges in the world today. The biggest in [...]