Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

Category: F

FINAL PROSPECTUS

A document used to sell a security. It describes the enterprise, management style, and financial status of the company. Compare this term to Red Herrig Prospectus.

FINANCIAL CLOSE

When conditions are finished or waived and the drawdown is possible for a contract.

FINANCIAL HOLDING COMPANY

In the United States, a holding company authorized under the GRAMMLEACHBLILEY ACT that is permitted to own entities involved in securities TRADING and UNDERWRITING, CORPORATE FINANCE, INSURANCE, asset management, and commercial banking.

FINANCIAL SETTLEMENT

A DERIVATIVE contract that requires SETTLEMENT in financial or cash, rather than physical, terms. See also PHYSICAL SETTLEMENT.

FINANCING INSTRUMENT

Documents used as a certificate, note or bond that gets equity capital or loan capital.

FIRE DEPARTMENT SERVICE CLAUSE

A rule in fire insurance that pays the insured for expense incurred by the fire department. This is a reimbursement after the insured has already paid the expenses.

FIRST LIEN

The claim that takes precedence over all others.

FIRST-TO-DEFAULT SWAP

An OVER THE COUNTER DEFAULT SWAP comprised of a BASKET of reference credits that entitles the purchaser to a payout on the first one that DEFAULTS; once a default occurs, the transaction

FISHER HYPOTHESIS

The idea that interest have premium inflation anticipation built in and the rates of interest are linked to a real rate that is constant. It is named after Irving Fisher who wrote

FIXED ASSETS (NET) TO NET WORTH RATIO

The overhead absorbed by the assets. If an unexpected event happens than this ratio is used to decide the loss. The labor hours budgeted and the overhead is used to come to

FIXED INTERVAL INVENTORY MODEL

Inventory when stock is watched regularly at intervals and if it falls below a level a reorder is placed. This is different than continuous stock intervals.

FLANKING

Marketing to a group that is not being served by the competition. They must fill the need or lose customers creating profit for the company that has targeted the market unexpectably.

FLAT YIELD

The interest on a security that is compared to the price. It is charged annually. It is shown as a percentage. Refer to redeptive yield.

FLEXIBLE SCHEDULING

When an employee can set their own hours based upon variances that the workplace allows.

FLIP-OVER PILL

When a shareholder can buy shares cheap to prevent takeover. It is only legal if the laws permit it. If all shareholders do this than the company trying to buy it cannot

FLOOD

Overflow in a normal dry area that is temporary. It can be water or mud. It is caused by overflow of water, buildup, runoff, or erosion on a shoreline.

FLUORIDATION

Extra flourides added to water to prevent teeth decay. It is safe in a low dose but more can cause health issues. It is 1ppm in water any higher and it causes

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