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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.

Factors of Production
The resources that consumers, firms, and governments use to produce goods and services and include labour, natural resources, entrepreneurship and capital.

Fee-Based Accounts
A type of account that bundles various services into a fee based on the client's assets under management, for example, 1% to 3% of client assets.

Fiduciary Responsibility
The responsibility of an investment advisor, mutual fund salesperson or financial planner to always put the client's interests first. The fiduciary is in a position of trust and must act accordingly.

Final Good
A finished product, one that is purchased by the ultimate end user.

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.

Financial Risk
The additional risk placed on the common shareholders from a company's decision to use debt to finance its operations.

Financing
The purchase for resale of a security issue by one or more investment dealers. The formal agreement between the investment dealer and the corporation issuing the securities is called the underwriting agreement. A term synonymous with underwriting.

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.

First-In-First-Out (FIFO)
Inventory items acquired earliest are sold first.

First Mortgage Bonds
The senior securities of a company as they constitute a first charge on the company's assets, earnings and undertakings before unsecured current liabilities are paid.

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

Fiscal Policy
The policy pursued by the federal government to influence economic growth through the use of taxation and government spending to smooth out the fluctuations of the business cycle.

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 that finds December 31 too early a date to close its books after the Christmas rush and so ends its fiscal year on January 31.

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

Fixed Exchange Rate Regime
A country whose central bank maintains the domestic currency at a fixed level against another currency or a composite of other currencies.

Fixed-Floater Preferred
See Delayed Floater.

Fixed-Income Securities
Securities that generate a predictable stream of interest or dividend income, such as bonds, debentures and preferred shares.

Fixed-Reset Preferred
See Delayed Floater.

Flat
Means that the quoted market price of a bond or debenture is its total cost (as opposed to an accrued interest transaction). Bonds and debentures in default of interest trade fl at.

Floating Exchange Rate
A country whose central bank allows market forces alone to determine the value of its currency, but will intervene if it thinks the move in the exchange rate is excessive or disorderly.

Floating Rate
A term used to describe the interest payments negotiated in a particular contract. In this case, a floating rate is one that is based on an administered rate, such as the Prime Rate. For example, the rate for a particular note may be 2% over Prime. See also Fixed Rate.

Floating-Rate Debentures
A type of debenture that offers protection to investors during periods of very volatile interest rates. For example, when interest rates are rising, the interest paid on floating rate debentures is adjusted upwards every six months.

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.

Forced Conversion
When a company's stock rises in value above the conversion price a company may force the convertible security holder to exchange the security for stock by calling back the security. Faced with receiving a lower call price (par plus a call premium) or higher valued shares the investor is forced to convert into common shares.

Foreign Bonds
If a Canadian company issues debt securities in another country, denominated in that foreign country's currency, the bond is known as a foreign bond. A bond issued in the U.S. payable in U.S. dollars is known as a foreign bond or a "Yankee Bond." See also Eurobond. Foreign Exchange Rate Risk The risk associated with an investment in a foreign security or any investment that pays in a denomination other than Canadian dollars, the investor is subject to the risk that the foreign currency may depreciate in value.

Foreign Pay
A Canadian debt security issued in Canada but pays interest and principle in a foreign currency is known as a foreign pay bond. This type of security allows Canadians to take advantage of possible shifts in currency values.

Forward
A forward contract is similar to a futures contract but trades on an OTC basis. The seller agrees to deliver a specified commodity or financial instrument at a specified price sometime in the future. The terms of a forward contract are not standardized but are negotiated at the time of the trade. There may be no secondary market.

Frictional Unemployment
Unemployment that results from normal labour turnover, from people entering and leaving the workforce and from the ongoing creation and destruction of jobs.

Front-End Load
A sales charge applied to the purchase price of a mutual fund when the fund is originally purchased.

Front Running
Making a practice, directly or indirectly, of taking the opposite side of the market to clients, or effecting a trade for the advisor's own account prior to effecting a trade for a client.

Full Employment
The level of unemployment due solely to both frictional and structural factors, or when cyclical unemployment is zero.

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 as revealed through its financial statements and an analysis of economic conditions that affect the company's business. See also Technical Analysis.

Funded Debt
All outstanding bonds, debentures, notes and similar debt instruments of a company not due for at least one year.

Future Income Taxes
Income tax that would otherwise be payable currently, but which is deferred by using larger allowable deductions in calculating taxable income than those used in calculating net income in the financial statements. An acceptable practice, it is usually the result of timing differences and represents differences in accounting reporting guidelines and tax reporting guidelines.

Futures
A contract in which the seller agrees to deliver a specified commodity or financial instrument at a specified price sometime in the future. A futures contract is traded on a recognized exchange. Unlike a forward contract, the terms of the futures contract are standardized by the exchange and there is a secondary market. See also Forwards.