Stock Market Help
Here is a list of common financial terms. Click on the letter that corresponds with the first letter of the financial term to get the definition.
Face Value
The stated value of a bond certificate when issued and when they are redeemed at maturity. Same as par value or principal. 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.
Federal Call
When a client makes certain types of transactions in their margin account, the brokerage firm will issue a call notifying the client if additional equity is required by the settlement date in order to satisfy Federal Regulation T.
Fees & Charges
These items relate to the costs of owning mutual fund shares. This view displays: if it is a Closed fund, Sales Charges, Exit Fee, Expense Ratio, 5-Year Fee, Phone Switch options.
Fiscal Policy
A method where governments use taxes and budgeting to raise revenue for public purposes. Another method is monetary policy, which seeks to influence the money supply by raising or lowering interest rates and thereby changing credit demand.
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 Equities
A mutual fund whose holdings can vary between a preponderance of stocks or bonds, depending on market conditions. Flexible funds seek to take advantage of changing market conditions.
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.
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.
Futures
Investment contracts which specify the quantity and price of a commodity to be purchased or sold at a later date. On contract date, the buyer must take physical possession or make delivery of the commodity, which can only be avoided by closing out the contract(s) before that date. Futures can be used for speculation or hedging.