Secured Loans
Agreement to borrow or lend at a specified future date at an interest rate that is
fixed today.
Forward sale
A method for hedging price risk which involves an agreement between a lender
and an investor to sell particular kinds of loans at a specified price and future
time.
Forward trade
A transaction in which the settlement will occur on a specified date in the future
at a price agreed upon the trade date.
Fourth market
Direct trading of large in exchange-listed securities between investors without the
use of a broker.
FRA
See: Forward rate agreement
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that purchases residential mortgages in
the secondary market from S&Ls, banks, and mortgage bankers and securities
these mortgages for sale into the capital markets.
Free cash flows
Cash not required for operations or for reinvestment. Often defined as earnings
before interest (often obtained from the operating income line on the income
statement) less capital expenditures less the change in working capital.
Free delivery
Used in the context of general equities. Securities industry procedure whereby
delivery of securities sold is made to the buying customers bank without the
requirement of immediate payment, thus a credit agreement of sorts. Antithesis
of delivery vs. Payment.
Free float
An exchange rate system characterized by the absence of government
intervention. Also known as clean float.
