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840 terms · page 14 of 35


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Market Basics & Instruments

Follow-on Public Offer

A public issue of shares by a company that is already listed, made after its initial public offering.

Test: the issuer is already listed and is offering further shares to the public at large qualitative
Economy, Macro & Market Cycles

Foreign Exchange Reserves

Foreign currency assets, gold and reserve positions held by a central bank to meet external obligations and manage the currency.

Import Cover = Foreign Exchange Reserves / Average Monthly Imports, expressed in months ₹ crore
Economy, Macro & Market Cycles

Foreign Institutional Flows

Net purchases or sales of Indian securities by foreign portfolio investors.

Net Flow = Value of Purchases - Value of Sales by foreign portfolio investors over the period ₹ crore
Indian Market, Regulation & Taxation

Foreign Portfolio Investor

A non-resident investor registered with SEBI to invest in Indian securities markets.

Test: the entity holds a SEBI FPI registration in the applicable category and invests within prescribed limits qualitative
Derivatives, Futures & Options

Forward Contract

A privately negotiated agreement to buy or sell an asset at a set price on a future date, not traded on an exchange.

Test: terms are bilaterally negotiated, the contract is not exchange-traded, and settlement occurs directly between the parties qualitative
Fundamental Analysis & Valuation

Forward Price-to-Earnings

The price-to-earnings ratio computed using forecast earnings for a future period rather than reported ones.

Forward P/E = Current Market Price / Estimated Earnings per Share for the Forecast Period ratio (x, times)
Market Psychology & Behavioural Finance

Framing Effect

The tendency for a decision to change depending on how the identical information is presented.

Test: preferences reverse when the same outcome is described as a gain rather than as a loss, or in different units qualitative
Financial Statements & Accounting

Free Cash Flow

The cash a business generates after funding the capital expenditure needed to maintain and grow its asset base.

Free Cash Flow = Operating Cash Flow - Capital Expenditure ₹ crore
Fundamental Analysis & Valuation

Free Cash Flow to Equity

The cash available to shareholders after operating costs, capital expenditure, debt interest and net debt movements.

FCFE = Free Cash Flow to Firm - Interest x (1 - Tax Rate) + Net New Borrowing ₹ crore
Fundamental Analysis & Valuation

Free Cash Flow to Firm

The cash generated by operations available to all capital providers, before any payments to lenders or shareholders.

FCFF = EBIT x (1 - Tax Rate) + Depreciation and Amortisation - Capital Expenditure - Increase in Working Capital ₹ crore
Fundamental Analysis & Valuation

Free Cash Flow Yield

Free cash flow expressed as a percentage of market capitalisation or enterprise value.

Free Cash Flow Yield = Free Cash Flow / Market Capitalisation x 100 %
Market Basics & Instruments

Free Float

The portion of a company's shares that is actually available for public trading, excluding promoter, strategic and locked-in holdings.

Free Float = Total Shares Outstanding - Promoter Holding - Strategic and Locked-in Holdings shares
Market Basics & Instruments

Free-Float Market Capitalisation

The market value of only those shares available for public trading, used to weight constituents in Indian indices.

Free-Float Market Capitalisation = Market Price x Free Float Shares ₹ crore
Indian Market, Regulation & Taxation

Front Running

Trading ahead of a known large order to profit from the price movement that order will cause.

Test: a person with knowledge of an impending substantial order transacts in the same security before that order is executed qualitative
Funds, ETFs & Index Investing

Fund Manager

The individual responsible for making investment decisions within a scheme's mandate.

Test: the named person holds discretion over security selection within the limits set by the scheme document and by regulation qualitative
Funds, ETFs & Index Investing

Fund of Funds

A mutual fund that invests in units of other funds rather than directly in securities.

Total Cost = Fund of Funds Expense Ratio + Weighted Average Expense Ratio of the Underlying Funds %
Fundamental Analysis & Valuation

Fundamental Analysis

The study of a company's financial statements, industry and economics in order to estimate what its shares are worth.

Test: the conclusion rests on the issuer's business economics rather than on the behaviour of its price qualitative
Derivatives, Futures & Options

Futures Contract

A standardised exchange-traded agreement to buy or sell an underlying asset at a set price on a set future date.

Contract Value = Futures Price x Lot Size; Profit or Loss = (Exit Price - Entry Price) x Lot Size, sign adjusted for direction
Market Psychology & Behavioural Finance

Gambler's Fallacy

The belief that an independent random outcome is due to reverse after a run in one direction.

Test: the predicted probability of the next outcome changes on the basis of prior independent outcomes qualitative
Derivatives, Futures & Options

Gamma

The rate at which an option's delta changes for a one-unit change in the underlying.

Gamma = Change in Delta / Change in Underlying Price ratio (x, times)
Technical Analysis & Chart Patterns

Gap

A discontinuity on a chart where a period's entire range lies away from the previous period's range, with no trading in between.

Gap % = (Current Open - Previous Close) / Previous Close x 100 %
Technical Analysis & Chart Patterns

Gap Down

An opening price below the previous period's low, leaving an unfilled space on the chart.

Test: Current Open < Previous Low %
Technical Analysis & Chart Patterns

Gap Up

An opening price above the previous period's high, leaving an unfilled space on the chart.

Test: Current Open > Previous High %
Economy, Macro & Market Cycles

GDP Growth Rate

The percentage change in real gross domestic product from one period to the corresponding earlier one.

GDP Growth = (Current Period Real GDP - Prior Period Real GDP) / Prior Period Real GDP x 100 %