Factor Analysis
An analysis aimed at finding a small number of factors that describe most of the correlated variables.

Face Value
Value of a security shown on the certificate (eg the principal amount of a bond) (also known as Par Value).

Floating Rate Note
Note whose interest payment varies with the short term interest rate.

Foreign exchange

Free on board - A price for a material which covers only the cost of the material and of loading it on to the vessel. Variants include "F.A.S." (Free Alongside Ship) and "F.O.R." (Free On Rail) which are self-explanatory.
(see also C.I.F. ).

Forward Contract
A contract to buy or sell a commodity or security for delivery at some time in the future: the contract must specify quantity and quality; date to be delivered; price; and (for commodities) location to be delivered.

Forward Exchange Rate
Rate fixed today for exchanging currency at some future date (see also Spot Exchange Rate).

Forward Interest Rate
The interest rate for a future period of time implied by the rates prevailing in the market today.

Forward Rate Agreement (FRA)
An agreement to borrow or lend at a specified future date at an interest rate that is fixed today.

Forward Swap
An agreement to enter into a swap at some point in future (also called a deferred swap).

Fundamental Analysis
To assess market prices by analysing factors such as economic data; political decisions; supply and demand for commodities; or expected future cashflows of a stock (see also technical analysis).

Futures Contract
Similar to a forward contract, a futures contract is an agreement to buy or sell a commodity or security at a certain price, time and location in the future. Unlike forward contracts, futures contracts are traded exclusively on regulated exchanges and are settled daily based on their current value in the market place.

Futures Option
An option on a futures contract.
(see also options).

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