What Is a Front Fee? The front fee is the option premium paid by an investor upon the initial purchase of a compound option. A compound option is one where the underlying asset is also an option; it is an option on an option. The front fee gives the investor the right, but not the
What Are Fronting Policies? A fronting policy is a risk management technique in which an insurer underwrites a policy to cover a specific risk, but then cedes the risk to a reinsurer. Fronting policies, which are a type of alternative risk transfer (ART), are most commonly used by large organizations. Because the reinsurer takes on the
What Is the Front Office? The front office represents the customer-facing division of a firm. For example, customer service, sales, and industry experts who provide advisory services are considered part of a firm’s front office operations. The functions of the front office generally generate the majority of revenue for a firm. Key Takeaways On a
What Is Front-Running? Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially. A broker may also front-run based on insider knowledge that their firm is about to issue a buy or sell recommendation to clients that
What Is a Franchised Monopoly? A franchised monopoly refers to a company, or individual, that is sheltered from competition by virtue of an exclusive license or patent granted by the government, as the government believes it to be a beneficial component of the economy. Key Takeaways A franchised monopoly refers to a company, or individual
Franco Modigliani was a Neo-Keynesian economist who received the Nobel Prize in 1985. Modigliani was born in 1918 in Rome, Italy and later came to the United States at the outbreak of World War II. He is best known for his contributions to consumption theory, financial economics, and for the theory he developed, called the
What Is a Franked Dividend? A franked dividend is an arrangement in Australia that eliminates the double taxation of dividends. The shareholder can reduce the tax paid on the dividend by an amount equal to the tax imputation credits. An individual’s marginal tax rate and the tax rate for the company issuing the dividend affect
What Is Franked Investment Income? Franked investment income (FII) is income that is received as a tax-free distribution by one company from another. This income is typically tax-free to the receiving firm and is usually distributed in the form of a dividend. Franked investment income was introduced in the interest of avoiding double taxation of
What Is the Frankfurt Stock Exchange (FRA)? Located in Frankfurt, Germany, the Frankfurt Stock Exchange (FRA) is one of the largest and most efficient trading facilities in the world. It is the largest of the seven stock exchanges in Germany and the twelfth largest stock exchange in the world by market cap. The FRA posts
What Is a Franking Credit? A franking credit, also known as an imputation credit, is a type of tax credit paid by corporations to their shareholders along with their dividend payments. Australia and several other countries allow franking credits as a way to reduce or eliminate double taxation. Since corporations have already paid taxes on
