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.Floor broker A member who is paid a fee for executing orders for clearing members or their customers.Afloor broker executing customer orders must be licensed by the CFTC.Floor planning Arrangement used to finance inventory.A finance company buys the inventory, which is thenheld in trust by the user.Floor trader A member who generally trades only for his own account, for an account controlled by him orwho has such a trade made for him.Also referred to as a "local".Flower bond Government bonds that are acceptable at par in payment of federal estate taxes when owned bythe decedent at the time of death.Flow-through basis An account for the investment credit to show all income statement benefits of the creditin the year of acquisition, rather than spreading them over the life of the asset acquired.Flow-through method The practice of reporting to shareholders using straight-line depreciation andaccelerated depreciation for tax purposes and "flowing through" the lower income taxes actually paid to thefinancial statement prepared for shareholders.Force majeure risk The risk that there will be an interruption of operations for a prolonged period after aproject finance project has been completed due to fire, flood, storm, or some other factor beyond the controlof the project's sponsors.Forced conversion Use of a firm's call option on a callable convertible bond when the firm knows that thebondholders will exercise their option to convert.Foreign banking market That portion of domestic bank loans supplied to foreigners for use abroad.Foreign bond A bond issued on the domestic capital market of anther company.Foreign bond market That portion of the domestic bond market that represents issues floated by foreigncompanies to governments. 58Dictionary of Finantial and Business TermsLico Reis  Consultoria & Línguaslicoreis@terra.com.brForeign currency Foreign money.Foreign currency option An option that conveys the right to buy or sell a specified amount of foreigncurrency at a specified price within a specified time period.Foreign currency translation The process of restating foreign currency accounts of subsidiaries into thereporting currency of the parent company in order to prepare consolidated financial statements.Foreign direct investment (FDI) The acquisition abroad of physical assets such as plant and equipment, withoperating control residing in the parent corporation.Foreign equity market That portion of the domestic equity market that represents issues floated by foreigncompanies.Foreign exchange Currency from another country.Foreign exchange controls Various forms of controls imposed by a government on the purchase/sale offoreign currencies by residents or on the purchase/sale of local currency by nonresidents.Foreign exchange dealer A firm or individual that buys foreign exchange from one party and then sells it toanother party.The dealer makes the difference between the buying and selling prices, or spread.Foreign exchange risk The risk that a long or short position in a foreign currency might have to be closed outat a loss due to an adverse movement in the currency rates.Foreign exchange swap An agreement to exchange stipulated amounts of one currency for another currencyat one or more future dates.Foreign market Part of a nation's internal market, representing the mechanisms for issuing and tradingsecurities of entities domiciled outside that nation.Compare external market and domestic market.Foreign market beta A measure of foreign market risk that is derived from the capital asset pricing model.Foreign Sales Corporation (FSC) A special type of corporation created by the Tax Reform Act of 1984 thatis designed to provide a tax incentive for exporting U.S.-produced goods.Foreign tax credit Home country credit against domestic income tax for foreign taxes paid on foreignderived earnings.Forex Foreign exchange.Forfaiter Purchaser of promises to pay issued by importers.Formula basis A method of selling a new issue of common stock in which the SEC declares the registrationstatement effective on the basis of a price formula rather than on a specific range.48-hour rule The requirement that all pool information, as specified under the PSA Uniform Practices, in aTBA transaction be communicated by the seller to the buyer before 3 p.m.EST on the business day 48-hoursprior to the agreed upon trade date.Forward contract A cash market transaction in which delivery of the commodity is deferred until after thecontract has been made.It is not standardized and is not traded on organized exchanges.Although thedelivery is made in the future, the price is determined at the initial trade date.Forward cover Purchase or sale of forward foreign currency in order to offset a known future cash flow. 59Dictionary of Finantial and Business TermsLico Reis  Consultoria & Línguaslicoreis@terra.com.brForward delivery A transaction in which the settlement will occur on a specified date in the future at a priceagreed upon on the trade date.Forward differential Annualized percentage difference between spot and forward rates.Forward discount A currency trades at a forward discount when its forward price is lower than its spot price.Forward exchange rate Exchange rate fixed today for exchanging currency at some future date.Forward Fed funds Fed funds traded for future delivery.Forward forward contract In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed toat a fixed price for future delivery.Forward interest rate Interest rate fixed today on a loan to be made at some future date.Forward looking multiple A truncated expression for a P/E ratio that is based on forward (expected)earnings rather than on trailing earnings.Forward market A market in which participants agree to trade some commodity, security, or foreignexchange at a fixed price for future delivery.Forward premium A currency trades at a forward premium when its forward price is higher than its spotprice.Forward rate A projection of future interest rates calculated from either the spot rates or the yield curve.Forward rate agreement (FRA) Agreement to borrow or lend at a specified future date at an interest ratethat is fixed today.Forward sale A method for hedging price risk which involves an agreement between a lender and an investorto sell particular kinds of loans at a specified price and future time.Forward trade A transaction in which the settlement will occur on a specified date in the future at a priceagreed upon the trade date.Fourth market Direct trading in exchange-listed securities between investors without the use of a broker [ Pobierz caÅ‚ość w formacie PDF ]
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