Face Value:
The stated value, or par value, of a bond certificate when
issued and when they are redeemed at maturity. The face
value never changes but the current value does. Current
value for a bond is (face value x price) divided by 100.
Bonds are purchased as units of face value. For example,
you buy a $10,000 bond where the current value can be more
or less than $10,000, depending on market conditions.
Fee,12b-1:
Annual fee, expressed as a percentage of NAV, specifically
designated for marketing expenses for a given mutual fund.
This fee is included in the expense ratio.
Fences:
See COLLAR.
Fill-or-kill Order (FOK):
A type of order, which requires that the order be executed
completely or not at all. A fill-or-kill order is similar to
an all-or-none (AON) order. The difference is that if the
order cannot be completely executed (i.e., filled in its
entirety) as soon as it is announced in the trading crowd,
it is to be "killed" (i.e., cancelled)
immediately. Unlike an AON order, a FOK order cannot be used
as part of a GTC order.
First Call Date:
First date on which a corporation or municipality may redeem
part or all of a callable bond issue at a set price.
Fiscal Policy:
Federal tax and spending policies set forth by Congress or
the President of the United States. These policies directly
affect tax rates and regulate government spending in an
effort to control the U.S. economy.
Fiscal Year:
Any continuous 12 months, which is used by a business or
government as its annual accounting period. The U.S.
government fiscal year ends on September 30. A fiscal year
is designated by the year it ends. For example, an April -
March fiscal year 1993 ended on March 31, 1993 and began on
April 1, 1992.
Five-year Fee:
The total cost you might have to pay over 5 years for every
$1,000 investment in a given mutual fund. Five-year fee is
the best over-all measure for comparing fund costs if you
intend to hold onto the fund for at least 5 years.
Flexible Mutual Fund:
A mutual fund whose holdings can vary between stocks or
bonds, depending on market conditions. Flexible funds seek
to take advantage of changing market conditions.
Floater:
A debt instrument, such as a bond, with a variable interest
rate tied to another interest rate such as a Treasury Bond.
Floating Rate:
Rather than a fixed interest or coupon rate, some bonds and
CDs have a floating interest rate which is adjusted
periodically to market conditions. It is also called
Variable Rate.
Floor broker:
An exchange member who is eligible to execute orders, as an
agent, for customers of a member firm on the floor of an
exchange.
Floor trader:
An exchange member on the trading floor who buys and sells
for his or her own account.
Front-end Load:
The percentage of the purchase price that is charged and
deducted from the investment, same as sales Charge. For
example, if you invest $1000 in a 4% front-end load mutual
fund, you only purchase $960 worth of shares.
Fundamental analysis:
A method of forecasting stock prices based on the study of
earnings, sales, dividends, markets, and a number of other
factors.
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