Definition of Free on board

Free on board

Implies that distributive services like transport and handling performed on goods up to the
customs frontier of the economy from which the goods are classed as merchandise.

Free-on-Board (FOB) Destination

A shipping arrangement agreed to between buyer and
seller where title to the goods sold passes when the goods in question reach their destination.
When goods are shipped FOB destination, revenue is properly recognized when the goods reach
their destination.

Free-on-Board (FOB) Shipping Point

A shipping arrangement agreed to between buyer and
seller where title to the goods sold passes when the goods in question are delivered to a common
carrier. When goods are shipped FOB shipping point, revenue is properly recognized when the
goods are delivered to the common carrier.

Merchandise

All movable goods such as cars, textiles, appliances, etc. and 'f.o.b.' means free on board.

Arbitrage-free option-pricing models

Yield curve option-pricing models.

Big Board

A nickname for the New York Stock Exchange. Also known as The Exchange. More than 2,000
common and preferred stocks are traded. Founded in 1792, the NYSE is the oldest exchange in the United
States, and the largest. It is located on Wall Street in New York City.

Free cash flows

Cash not required for operations or for reinvestment. Often defined as earnings before
interest (often obtained from operating income line on the income statement) less capital expenditures less the
change in working capital.

Free float

An exchange rate system characterized by the absence of government intervention. Also known as
clean float.

Free reserves

Excess reserves minus member bank borrowings at the Fed.

Free rider

A follower who avoids the cost and expense of finding the best course of action and by simply
mimicking the behavior of a leader who made these investments.

Riskless or risk-free asset

An asset whose future return is known today with certainty. The risk free asset is
commonly defined as short-term obligations of the U.S. government.

Risk-free asset

An asset whose future return is known today with certainty.

Risk-free rate

The rate earned on a riskless asset.

Tax free acquisition

A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
ownership is transferred in the transaction is generally the same as the acquiree's, and 2) each seller who
receives only stock does not have to pay any tax on the gain he realizes until the shares are sold.

free cash flow

Generally speaking, this term refers to cash flow from
profit (cash flow from operating activities, to use the more formal term).
The underlying idea is that a business is free to do what it wants with its
cash flow from profit. However, a business usually has many ongoing
commitments and demands on this cash flow, so it may not actually be
free to decide what do with this source of cash. Warning: This term is
not officially defined anywhere and different persons use the term to
mean different things. Pay particular attention to how an author or
speaker is using the term.

Free Cash Flow

The funds available for distribution to the capital providers of the
company after investments inside the company have been made

Risk-free Rate

The rate of return on an investment with known future benefits; a
riskless rate of return, often estimated using the return earned on
short-term U.S. Treasury securities

Cost Accounting Standards Board (CASB)

a body established by Congress in 1970 to promulgate cost accounting
standards for defense contractors and federal agencies; disbanded
in 1980 and reestablished in 1988; it previously issued
pronouncements still carry the weight of law for those
organizations within its jurisdiction

North American Free Trade Agreement (NAFTA)

an agreement among Canada, Mexico, and the United States establishing the North American free Trade Zone, with a resulting reduction in trade barriers

Federal Reserve Board

board of Governors of the Federal Reserve System.

Free Trade

The absence of any government restrictions, such as tariffs or quotas, on imports or exports.

Public Oversight Board

An independent private-sector body that oversees the audit practices
of certified public accountants who work with SEC-regulated companies.

Material review board

A company committee typically comprising members representing
multiple departments, which determines the disposition of inventory
items that will not be used in the normal manufacturing or distribution process.

Risk-Free Rate

The rate of return obtainable on government of Canada treasury bills.

Initial margin requirement

When buying securities on margin, the proportion of the total market value of
the securities that the investor must pay for in cash. The Security Exchange Act of 1934 gives the board of
governors of the Federal Reserve the responsibility to set initial margin requirements, but individual
brokerage firms are free to set higher requirements. In futures contracts, initial margin requirements are set by
the exchange.

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