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F
Fifth letter of a Nasdaq stock symbol specifying that the issues is a foreign company.
FAC
See: Federal Advisory Council
Face value
See Also: Par value
Face-amount certificate
A debt_securities issued by face amount. The holder makes payments periodically to the issues, and the issuer promises to pay the purchaser the face value at maturity or the surrendered value if the security is presented by the maturity specified in the certificate.
Facilitation
The process of providing a market for a security. Normally, this refers to bids and offers made for large blocks of securities, such as those traded by institutions. Listed options may be used to offset part of the risk assumed by the trader who is facilitation the large block order. See also: Hedge ratio.
Factor
A financial institution that buys a firm's accounts receivable and collects the accounts.
Factor analysis
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a common stock, in terms of the behavior of a set of predictive factors.
Factor model
A way of decomposing the forces that influence a security's rate of return into common and firm-specific influences.
Factor portfolio
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of zero on any other factors.
Factor Return
The return attributable to a particular common factor. We decompose asset returns into a common factor component, based on the asset's exposures to common factors times the factor returns, and a specific return.
Factoring
Sale of a firm's accounts receivable to a financial institution known as a factor.
Fade
Refers to over-the-counter trading. Fill another OTC dealer's bid for or offer of stock.
Fail
A deal is said to fail if on the settlement date either the seller does not deliver securities in proper form or the buyer does not to deliver funds in proper form.
Fair game
An investment prospect that has a zero risk premium.
Fair market price
Amount at which an asset would change hands between two parties, that both have knowledge of the relevant facts. Also referred to as market price.
Fair price
The equilibrium price for futures_contract. Also called the theoretical futures price, which equals the spot price continuous_compounding at the cost_of_carry for some time interval. In the context of corporate goverance, Fair-Price provisions limit the range of prices a bidder can pay in two-tier offers. They typically require a bidder to pay to all shareholders the highest price paid to any during a specified period of time before the commencement of a tender offer and do not apply if the deal is approved by the board of directors or a supermajority of the target's shareholders. The goal of this provision is to prevent pressure on the target's shareholders to tender their shares in the front end of a two-tiered tender offer, and they have the result of making such and acquisition more expensive. A majority of states have fair price laws.
Fair price provision
See Also: Appraisal rights
Fair rate of return
The rate of return that state governments allow a public utility to earn on its investments and capital_expenditures. Utilities then use these profits to pay investors and provide service upgrades to their customers.
Fair value
In the context of futures, the equilibrium price for futures_contract. Also called the theoretical futures price, which equals the spot price continuous_compounding at the cost_of_carry for some time interval. More generally, fair value for any asset simply refers to the perception that it is neither underpriced (too cheap) nor overpriced (too expensive).
Fair-and-equitable test
A set of requirements for a plan of reorganization to be approved by the bankruptcy court.
Fairness opinion
An investment_bank professional opinion as to the price an acquiring firm's is offering in a takeover or merger.
Fall Down
In the context of general equities, may not be able to produce as indicated in one's advertised market, due to less help (than anticipated) from other parties or due to changing market conditions.
Fall out of bed
A sudden drop in a stock's price resulting from failed or poor business deals gone bad or falling through.
Fallen angels
Bonds that at the time of issue were considered investment grade but that have dropped below that rating over time.
Fallout risk
A type of mortgage pipeline risk that is generally created when the terms of the loan to be originated are set at the same time the sale terms are established. The risk is that either of the two parties, borrower or investor, fails to close and the loan "falls out" of the pipeline.
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