What Is Flight to Quality? Flight to quality occurs when investors in aggregate begin to shift their asset allocation away from riskier investments and into safer ones, for instance out of stocks and into bonds. Uncertainty in the financial or international markets usually causes this herd-like behavior. However, at other times, the move may be
What is Flip-Flop Note? Flip-flop note is a fixed-income security, backed by two different sources of debt – one with a fixed interest rate and the other with a variable interest rate, that allows the holder to choose their payment stream. Key Takeaways Flip-flop note is a fixed-income security, backed by two different sources of
What Is Flipping? Flipping refers to purchasing an asset with a short holding period with the intent of selling it for a quick profit rather than holding on for long-term appreciation. Flipping is most often used to describe short-term real estate transactions as well as the activities of some investors in initial public offerings (IPO).
What Is the Float? In financial terms, the float is money within the banking system that is briefly counted twice due to time gaps in registering a deposit or withdrawal. These time gaps are usually due to the delay in processing paper checks. A bank credits a customer’s account as soon as a check is
What Is a Floater? A floater, also known as a floating rate note (FRN), is a bond or other type of debt instrument whose interest payment is variable and tied to a predetermined benchmark index, such as London Inter-bank Offer Rate (LIBOR), that adjusts to current market conditions. A floater lies may be contrasted with
What Is an Insurance Floater? Floater insurance is a type of insurance policy that covers personal property that is easily movable and provides additional coverage over what normal insurance policies do not. Also known as a “personal property floater,” it can cover anything from jewelry and furs to expensive stereo equipment. How Floater Insurance Works
What Is the Fixed Amortization Method? The fixed amortization method refers to one of three ways by which early retirees of any age gain access to their retirement funds without penalty before turning 59½ under Rule 72t. The fixed amortization method spreads retirees’ account balances over their remaining life expectancies, as estimated by Internal Revenue
What Is a Fixed Annuity? A fixed annuity is a type of insurance contract that promises to pay the buyer a specific, guaranteed interest rate on their contributions to the account. By contrast, a variable annuity pays interest that can fluctuate based on the performance of an investment portfolio chosen by the account’s owner. Fixed
What Is a Fixed Asset? The term fixed asset refers to a long-term tangible piece of property or equipment that a firm owns and uses in its operations to generate income. The general assumption about fixed assets is that they are expected to last, be consumed, or be converted into cash after at least one
What Is the Fixed Asset Turnover Ratio? The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure operating performance. This efficiency ratio compares net sales (income statement) to fixed assets (balance sheet) and measures a company’s ability to generate net sales from its fixed-asset investments, namely property, plant, and equipment (PP&E). The
