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Funded pension plan
A pension plan in which all liabilities, including payments to be made to pensioners in the immediate future, are completely funded.
Funding
Used to describe the refinancing of a debt prior to its maturity (the same as refunding). In corporate finance refers to the floating of bonds to raise finance and levels of capital. See also: refunding.
Funding ratio
The ratio of a pension plan's assets to its liabilities.
Funding risk
The risk associated with the impact on a project's cash flow from higher funding costs or lack of availability of funds. See: interest rate risk.
Funds From Operations (FFO)
Used by real estate and other investment_trust to define the cash flow from trust operations; earnings with depreciation and amortization added back. A similar term increasingly used is funds available for distribution (FAD), which is FFO less capital_investment in trust property and the amortization of mortgages.
Fungibility
The substitutability of listed_option, which is dependent upon their common expiration_date and strike_price. The congruence of expiration dates and strike prices lets investors close positions by offsetting transactions through the options clearing_corporations.
Furthest month
Used in the context of commodities or options trading to refer to the month that is away from the contract's date of settlement.
FUTOP
The Danish derivatives market, merged with the Copenhagen Stock Exchange in 1997.
Future
A term used to designate all contracts covering the sale of financial instruments or physical commodity for future delivery on a commodity exchange.
Future investment opportunities
The identification of additional, more valuable, investment opportunities in the future that result from a current opportunity or operation.
Future value
The amount of cash at a specified date in the future that is equivalent in value to a specified sum today.
Futures
A term used to designate all contracts covering the sale of financial instruments or physical commodity for future delivery on a commodity exchange.
Futures commission merchant (FCM)
A firm or person engaged in soliciting or accepting and handling orders for the purchase or sale of futures_contract, subject to the rules of a futures exchange and, who, in connection with such solicitation or acceptance of orders, accepts any money or securities to provide margin for any resulting trades or contracts. The FCM must be licensed by the CFTC. Related: Commission house, omnibus account.
Futures contract
A legally binding agreement to buy or sell a commodity or financial instrument in a designated future month at a price agreed upon today by the buyer and seller. Futures contracts are standardized according to the quality, quantity, and delivery time and location for each commodity. A futures contract differs from an option because an option is the right to buy or sell, while a futures contract is the promise to actually make a transaction. A future is part of a class of securities called derivatives, so named because such securities derive their value from the worth of an underlying investment.
Futures contract multiple
A constant set by an exchange, which when multiplied by the futures price gives the dollar value of a stock index futures contract.
Futures market
A market where contracts for future delivery of a commodity or a security are bought or sold.
Futures option
An option on a futures contract. Related: Options on physicals.
Futures price
The price at which parties to a futures contract agree to transact upon the settlement date.
Fuzzy Logic
A system which mathematically models complex relationships which are usually handled in a vague manner by language. Under the title of "Fuzzy Logic" falls formal fuzzy logic (a multi-valued form of logic), and fuzzy sets. Fuzzy sets measure the similarity between an object and a group of objects. A member of a fuzzy set can belong to both the set, and its compliment. Fuzzy sets can more closely approximate human reasoning than traditional "crisp" sets. See Also: Crisp Sets
FVO (for valuation only)
See: For your information
FX Rate
See Also: Foreign exchange rate
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