F,G,H

Question 1

Federal reserve beige book

Answer 1

A summary of reports by the Federal
Reserve District Banks on economic
conditions in their regions.

Question 2

Feedback stage

Answer 2

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.

Question 3

Financial leverage

Answer 3

A company’s total asset divided by common

equity.

Question 4

First Order Risk

Answer 4

Exposure to changes in the general
direction of interest rates, as well as equity,
currency and commodity markets.

Question 5

Fixed-floater bond

Answer 5

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

Question 6

Fixed-income arbitrage hedge fund

Answer 6

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.

Question 7

Flat yield curve

Answer 7

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

Question 8

Flattening of yield curve

Answer 8

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.

Question 9

Flight to quality

Answer 9

A noticeable increase in credit spreads in
economic downturns. See also Quality
spread theory.

Question 10

Floating-rate securit

Answer 10

A debt security with a variable coupon rate
that changes in response to changes in
another benchmark or interest rate. See also
Coupon rate.

Question 11

Flow-through share

Answer 11

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.

Question 12

Foreign bond

Answer 12

A debt security issued and sold in a
domestic market by a non-domestic
government or corporation. See also
Eurobond.

Question 13

Free Cash Flow to Equity (FCFE)

Answer 13

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.

Question 14

Free Cash Flow to the Firm (FCFF)

Answer 14

Free cash flow to equity plus after-tax
interest expense minus net new borrowing.
See also Free cash flow to equity.

Question 15

Fully diluted earnings per share

Answer 15

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.

Question 16

Fund of hedge funds (FoHF)

Answer 16

A portfolio of hedge funds, overseen by a
manager who determines which hedge
funds to invest in and how much to invest
in each.

Question 17

Fundamental anomaly

Answer 17

An irregularity in a security’s current price
when compared to a fundamental
assessment of its intrinsic value.

Question 18

Future value

Answer 18

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.

Question 19

Futures Contract

Answer 19

A legally binding agreement traded on a

regulated futures exchange.

Question 20

Generally Accepted Accounting

Principles (GAAP)

Answer 20

Rules, conventions, and guidelines used

to prepare financial statements.

Question 21

Global macro hedge fund

Answer 21

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.

Question 22

Goal shortfall

Answer 22

The probability of not meeting one or more

personal or financial goals.

Question 23

Gordon growth model

Answer 23

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.

Question 24

Greensheet

Answer 24

Greensheet

Question 25

Gross Domestic Product (GDP

Answer 25

The market value of goods and services
produced by labour and capital in a
country

Question 26

Growth industry

Answer 26

An industry with a successful rate of growth

no matter how the economy is performing.

Question 27

Growth stock

Answer 27

A stock with a high price-to-book ratio. See

also Value stock.

Question 28

Guaranteed Investment Certificate

GIC

Answer 28

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.

Question 29

Guarantor or Issuer of the PPN

Answer 29

The entity that guarantees the principal and

the return, if any, at maturity of the PPN.

Question 30

Head-and-shoulders bottom

formation

Answer 30

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.

Question 31

Head-and-shoulders formation

Answer 31

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.

Question 32

Head-and-shoulders top formation

Answer 32

Head-and-shoulders top formation

Question 33

Hedge fund

Answer 33

A lightly regulated pool of capital that has
great flexibility in the execution of their
investment strategies.

Question 34

Heuristics

Answer 34

Simple, efficient rules of thumb

Question 35

High-yield bond

Answer 35

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

Question 36

Home bias

Answer 36

An investing bias created when individuals
favour investments in their home market
despite ample opportunities abroad to
increase the efficiency of their portfolios.

Question 37

Horizontal resistance

Answer 37

A horizontal resistance level. See also

Resistance level.

Question 38

Horizontal support

Answer 38

A horizontal support level. See also

Support level.

Question 39

Housing starts

Answer 39

A monthly survey (conducted 
independently in both Canada and the 
U.S.) measuring the number of new 
housing units started during the survey 
period.