Guide to Analysing Companies

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FIXED-INCOME SECURITY
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dend. Such instruments protect the holder during periods of
low inflation but do nothing to guard against the erosion of
buying power during times of rising inflation. The prices of
fixed-income securities rise and fall according to demand, like
any other, as well as being determined by the value of the re-
maining interest payable until maturity.
Fixed rate
A rate of interest that remains the same all the way through
to the maturity of the financial instrument to which it
attaches. (See also variable rate.)
Fixing
The setting of the gold price in London twice a day – at
10.30am and 3pm – by several big gold dealers which are all
market-making members of the London Bullion Market Associ-
ation. Although fixed for transactions that take place at the time,
the price is not set in stone and can fluctuate between fixings.
The gold price is fixed in sterling, although it is most often ex-
pressed as the dollar equivalent. A smaller number of traders
gather once a day by telephone to fix the silver price.
Flight capital
Money that rushes out of a country when political or economic
uncertainty undermines people’s faith in a currency’s ability to
maintain its value. Such money generally heads for stable
places such as Geneva or Miami, and for stable currencies such
as the Swiss franc or the dollar. The expression is also some-
times used to cover untaxed and illegal money that stems from
sources such as fraud or drug dealing.
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FIXED RATE
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Flip-flop bond
A bond that can be turned into another type of debt instru-
ment at the investor’s discretion, and can then equally easily be
flipped back into the original form of investment.