What is a Floating Exchange Rate? A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate. Key
What Is a Floating Rate Fund? A floating rate fund is a fund that invests in financial instruments that pays a variable or floating interest rate. A floating rate fund, which can be a mutual fund or an exchange-traded fund (ETF), invests in bonds and debt instruments whose interest payments fluctuate with an underlying interest
What Is Floating Stock? Floating stock is the number of shares available for trading of a particular stock. Low float stocks are those with a low number of shares. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares. Closely-held shares are those owned by insiders, major shareholders
What Is a Float Shrink? The term float shrink refers to a reduction in the number of a company’s shares available for trading. A float shrink can occur in several ways but is most commonly associated with share buybacks, as this is a popular way for companies to return cash to shareholders. A float shrink
What Is Flood Insurance? Flood insurance is a type of property insurance that covers a dwelling for losses sustained by water damage specifically due to flooding. Floods may be caused by heavy or prolonged rain, melting snow, coastal storm surges, blocked storm drainage systems, or levee dam failure. In many places, a flood is considered
What Is Floor Area Ratio? The floor area ratio is the relationship between the total amount of usable floor area that a building has, or has been permitted to have, and the total area of the lot on which the building stands. A higher ratio likely would indicate a dense or urban construction. Local governments
What Is a Floor Broker? A floor broker, also known as a “pit broker,” is an independent member of an exchange who is authorized to execute trades for clients on the exchange floor. Floor brokers are primarily active on stock exchanges but can also be found on other exchanges, such as futures and options exchanges.
What Is a Floor Limit? A floor limit—also known as a “credit floor”—is the maximum charge that can be made to a credit card without obtaining prior authorization. As such, a floor limit is designed to protect against the risk of credit card theft. Key Takeaways A floor limit is the maximum charge that can
What Is a Floor Loan? A floor loan is a specific kind of loan designed specifically for real estate construction projects. Floor loans apply to buildings that will be occupied by tenants. The floor loan is the minimum amount that a lender agrees to advance in order to enable the builder to commence the development
What Is Floor Planning? Floor planning is a form of retailer financing for large ticket items displayed on showroom floors or lots. Specialty lenders, traditional banks, and finance arms of manufacturers provide the short-term loans to retailers to purchase items and they are then repaid as the items are sold. Automobile dealerships utilize floor plan
