Business Finance

A floating-rate note (FRN) is a type of bond or debt instrument where the interest rate paid to investors fluctuates over time based on a specified benchmark or reference rate. Unlike fixed-rate bonds, which have a predetermined interest rate for the entire duration of the bond, the interest rate on an FRN adjusts periodically, providing […]

In the context of financial markets, the floor refers to a physical trading venue where securities, commodities, or other financial instruments are bought and sold. It serves as a centralized location where traders, brokers, and investors gather to conduct transactions directly. Key Aspects of the Floor Functions of the Floor Trading and Execution Market Making

A floor trader is a professional who executes buy and sell orders for securities, such as stocks or options, directly on the trading floor of a stock exchange. This role involves active participation in market transactions, primarily focusing on making profits through rapid trading and market-making activities. Key Aspects of a Floor Trader Responsibilities of

Flotation, in business and finance, refers to the process by which a company offers its shares (stocks) to the public for the first time. It is also known as an Initial Public Offering (IPO). This process allows companies to raise capital from investors in exchange for ownership stakes in the company. Key Aspects of Flotation

A forward-exchange contract is a financial agreement between two parties to exchange a specified amount of one currency for another currency at a future date, at a predetermined exchange rate. These contracts are used to hedge against currency risk and manage exposure to fluctuating exchange rates in international trade and finance. Key Features of Forward-Exchange

Forward price refers to the agreed-upon price at which two parties agree to buy or sell an asset in the future. It is determined at the inception of a forward contract, which is a private agreement between the buyer and seller to exchange the asset at a specified future date. Key Features of Forward Price

A Forward-Rate Agreement (FRA) is a financial contract between two parties that allows them to lock in an interest rate today for a transaction that will take place in the future. FRAs are often used by financial institutions, corporations, and investors to hedge against fluctuations in interest rates. These agreements specify a future date (settlement

Founders’ shares are a class of shares issued to the original founders or early investors of a company. These shares typically carry special rights or privileges that differentiate them from common shares. Founders’ shares are often issued during the initial stages of a company’s formation and are used to reward and incentivize founders for their

Fractional banking refers to a banking system where banks keep only a fraction of their deposits in reserve and lend out the remainder. This practice allows banks to create credit and expand the money supply beyond the amount of base money (such as cash and reserves) held by the central bank. Fractional banking is the

Franked Investment Income (FII) refers to dividends received by a shareholder that have already been taxed at the corporate level before distribution. This concept primarily exists in tax systems that aim to prevent the double taxation of corporate profits. When a company pays a dividend from its after-tax profits, the recipient (shareholder) receives a tax