F,G,H Flashcards
Federal reserve beige book
A summary of reports by the Federal
Reserve District Banks on economic
conditions in their regions.
Feedback stage
The third stage of the investment
management process, encompassing:
monitor the markets and the client;
appraise the portfolio’s performance; and
re-balance the portfolio. See also Execution
stage and Planning stage.
Financial leverage
A company’s total asset divided by common
equity.
First Order Risk
Exposure to changes in the general
direction of interest rates, as well as equity,
currency and commodity markets.
Fixed-floater bond
A debt security that entitles the holder to a
fixed coupon rate for a predetermined
period of time after which the coupon rate
becomes variable
Fixed-income arbitrage hedge fund
A hedge fund that attempts to profit from
price anomalies between related interest rate securities and derivatives, including government and non-government bonds, mortgage backed securities, and interest rate swaps.
Flat yield curve
A yield curve with a slope near zero,
characterized by short-term interest rates
that are exactly or very close to longer-term
rates. See also Inverted yield curve,
Normal yield curve, and Yield curve
Flattening of yield curve
A yield curve twist that causes the yield
curve to have a lower slope than it did
before the twist. See also Yield curve and
Yield curve twist.
Flight to quality
A noticeable increase in credit spreads in
economic downturns. See also Quality
spread theory.
Floating-rate securit
A debt security with a variable coupon rate
that changes in response to changes in
another benchmark or interest rate. See also
Coupon rate.
Flow-through share
A type of common equity issued by junior
resource companies. Exploration companies
renounce certain deductible expenses
incurred in the running of their businesses.
These deductions are flowed through to
investors.
Foreign bond
A debt security issued and sold in a
domestic market by a non-domestic
government or corporation. See also
Eurobond.
Free Cash Flow to Equity (FCFE)
Cash flow available to a company’s common shareholders after paying all operating expenses and interest and principal on its debt, and after investing in working capital and fixed assets.
Free Cash Flow to the Firm (FCFF)
Free cash flow to equity plus after-tax
interest expense minus net new borrowing.
See also Free cash flow to equity.
Fully diluted earnings per share
A company’s earnings per share based on the weighted average number of common shares outstanding plus the number of shares that the company would have to issue if all stock options and warrants were exercise and all convertible securities were converted. See also Basic earnings per share and Earnings per share.
Fund of hedge funds (FoHF)
A portfolio of hedge funds, overseen by a
manager who determines which hedge
funds to invest in and how much to invest
in each.
Fundamental anomaly
An irregularity in a security’s current price
when compared to a fundamental
assessment of its intrinsic value.
Future value
A sum of money to be received in the
future, or the value on a future date of
money that has been invested at a known
interest rate.
Futures Contract
A legally binding agreement traded on a
regulated futures exchange.
Generally Accepted Accounting
Principles (GAAP)
Rules, conventions, and guidelines used
to prepare financial statements.
Global macro hedge fund
A hedge fund that attempts to profit from
major events affecting entire economies,
such as shifts in government policy that
alter interest rates, thereby affecting
currency, stock, and bond markets.
Goal shortfall
The probability of not meeting one or more
personal or financial goals.
Gordon growth model
A dividend discount model that assumes
that dividends will grow at a constant rate
forever. Also known as the constant growth
model. See also Dividend discount model.
Greensheet
Greensheet
Gross Domestic Product (GDP
The market value of goods and services
produced by labour and capital in a
country
Growth industry
An industry with a successful rate of growth
no matter how the economy is performing.
Growth stock
A stock with a high price-to-book ratio. See
also Value stock.
Guaranteed Investment Certificate
GIC
A debt instrument issued by trust
companies and banks. In the past, GICs
were locked in with a fixed term and a fixed
rate of interest. However, most financial
institutions now offer GICs with various
features, including the ability to cash out
the investment before maturity, interest
rates that rise over time (known as step-up
GICs), floating interest rates, and returns
linked to the return on stock indices.
Guarantor or Issuer of the PPN
The entity that guarantees the principal and
the return, if any, at maturity of the PPN.
Head-and-shoulders bottom
formation
A head and shoulder formation that appears
at the end of a bear market. Also known as
an inverse head-and-shoulders formation.
See also Head-and-shoulders formation
and Head-and-shoulders top formation.
Head-and-shoulders formation
A reversal formation that gets its name from
its similarity to a human head and
shoulders silhouette. The formation is
defined by four key features: a left shoulder,
a head, a right shoulder, and a neckline. See
also Head-and-shoulders bottom
formation, Head-and-shoulders top
formation, and Reversal formation.
Head-and-shoulders top formation
Head-and-shoulders top formation
Hedge fund
A lightly regulated pool of capital that has
great flexibility in the execution of their
investment strategies.
Heuristics
Simple, efficient rules of thumb
High-yield bond
A debt security with a credit rating of BB
(or equivalent) or lower. Also known as a
junk bond. See Credit rating and
Investment grade bond
Home bias
An investing bias created when individuals
favour investments in their home market
despite ample opportunities abroad to
increase the efficiency of their portfolios.
Horizontal resistance
A horizontal resistance level. See also
Resistance level.
Horizontal support
A horizontal support level. See also
Support level.
Housing starts
A monthly survey (conducted independently in both Canada and the U.S.) measuring the number of new housing units started during the survey period.
