Investing Glossary: F

fiat money: Currency that a government declares to be legal tender, even though it is not backed by reserves of physical assets (such as gold). The value of fiat money derives solely from the public’s confidence and faith in its ability to serve as a storage medium for purchasing power. Most of the world’s money is fiat money.

Financial Industry Regulatory Authority; FINRA: The largest non-governmental regulatory organization responsible for overseeing all securities firms that do business in the United States. Responsibilities include professional training, testing and licensing of registered representatives, and arbitration and mediation.

foreign currency trading; forex : Speculation on the value of one currency versus another, in which you buy one country’s currency—just as you’d buy a stock or other security—in the hope that it will appreciate relative to the value of another currency.

futures: Contracts where you agree to buy or sell a specific amount of a commodity, currency, or other asset at a specified price on a specified future date. Unlike an option, a futures contract creates an obligation, rather than just a right, to buy and sell the underlying security.

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