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glossary


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Face Value

The value of a bond or debenture that appears on the face of the certificate. Face value is ordinarily the amount the issuer will pay at maturity. Face value is no indication of market value.

Fails

Short for failed deliveries. Failure to deliver a security on Settlement Date.

Final Prospectus

The prospectus which supersedes the preliminary prospectus and is accepted for filing by applicable provincial securities commissions. The final prospectus shows all required information pertinent to the new issue and a copy must be given to each first-time buyer of the new issue.

Finance or Acceptance Company Paper

Short-term negotiable debt securities similar to Commercial Paper, but issued by finance companies.

Financial Intermediary

An institution such as a bank, life insurance company, credit union or mutual fund which receives cash - which it invests - from suppliers of capital.

Firm Bid - Firm Offer

An undertaking to buy (firm bid) or sell (firm offer) a specified amount of securities at a specified price for a specified period of time, unless released from this obligation by the seller in the case of a "firm bid" or the buyer in the case of a "firm offer".

Fiscal Agent

An investment dealer appointed by a company or government to advise in financial matters and to manage the underwriting of its securities.

Fiscal Policy

The policy pursued by the federal government to direct the economy through taxation and the level and allocation of public spending.

Fiscal Year

A company's accounting year. Due to the nature of particular businesses, some companies do not use the calendar year for their bookkeeping. A typical example is the department store which finds December 31st too early a date to close its books after the Christmas rush and so perhaps has a January 31st fiscal year.

Fixed Asset

A tangible long-term asset such as land, building or machinery, held for use rather than for processing or resale.

Fixed Charges

A company's expenses, such as debt interest, which it has agreed to pay whether or not earned, and which are deducted from income before income taxes are calculated.

Flat

Means that the quoted market price of a bond or debenture is the total cost of the debt instrument (as opposed to "and accrued interest" transactions). Bonds and debentures in default of accrued interest trade flat.

Floor Trader

Employee of a member of a stock exchange, who executes buy and sell orders on the floor (trading area) of the exchange for the firm and its clients.

Flow-Through Shares

Tax deductions and credits, normally available only to a corporation, may flow through to owners of the corporation's flow-through shares. Canadian exploration and mining companies are able to issue such shares at a premium because investors in these shares are considered to be funding exploration and development costs and are therefore entitled to deduct these expenses from all other income.

Formula Investing

An investment technique. One formula calls for the shifting of funds from common shares to preferred shares or bonds as the stock market, on average, rises above a certain predetermined point - and the return of funds to common share investments as the stock market average declines.

Fully Diluted Earnings per Share

Earnings per common share calculated on the assumption that all convertible securities are converted into common shares and all outstanding rights, warrants, options and contingent issues are exercised.

Fundamental Analysis

Security analysis based on fundamental facts about a company - sales, earnings, dividend prospects. (See also Technical Analysis.)

Funded Debt

All outstanding bonds, debentures, notes and similar debt instruments of a company payable after one year.


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