mimicking the behavior of a leader who made these investments. Free-riding A forbidden practice in which the member of an underwriting syndicate retains a portion of an initial public offering (IPO) and resells the securities at a higher price determined by the market at a later time. Also forbidden is a brokerage customer's rapid buying and selling of a security without putting up money for the purchase. Free right of exchange An investor's right to transfersecurities from one name to another name without paying charges that accompany a salestransaction. Free stock A stock that is paid for in full and is not pledged in any way as collateral. Free to trade Used in the context of general equities. Not subject to any internal (restricted list) or external restrictions on trading; hence, the trader is free to solicit interest. Freed up A term used to indicate that an underwriting syndicate's members are no longer restricted to the fixed price agreed upon in the agreement among underwriters and are permitted to trade the security on a free marketbasis. Freely floating exchange rate system Monetary system in which exchange rates are allowed to move due to market forces without intervention by country governments. Freeze out The action of pressurizing shareholders with relatively minor amounts of stock to sell their shares after a takeover. Freight A transportation term meaning either goods being transported, and/or charges incurred for such transport. Freight Forwarder See: forwarder. Freight shippers Agents who coordinate the logistics of transportation. FREIT See: Finite-Life Real Estate Investment Trust Frequency distribution The organization of data to show how often certain values or ranges of values occur. Fresh picture Updated estimation of a stock or market, usually following recent trading activity or news that has changed the previous look. Fresh signal Piece of information (fundamental or technical) leading one to believe a stock will move in a certain manner. Friction costs Costs, both implied and direct, associated with a transaction. Such costs include time, effort, money, and associated tax effects of gathering information and making a transaction. Frictional cost The difference between an index fundreturn and the index it represents. The typically lower rate of return from the fund results from transactions costs. Frictionless market Ideal trading environment that imposes no costs or restraints on transactions. Frictions The "stickiness" involved in making transactions; the total process including time, effort, money, and tax effects of gathering information and making a transaction such as buying a stock or borrowingmoney. Friendly Merger A business combination that the management of both firms believes will be beneficial to stockholders. Friendly takeover Merger when the target firm's management and board of directors is in favor of the takeover. Antithesis of hostile takeover. Front-end load The fee applied to an investment at the time of initial purchase, e.g., on a mutual fund purchased from a broker or mutual fund company. Front fee The fee initially paid by the buyer upon entering a split-fee optioncontract. Front office Refers to revenue generating sales personnel in a brokerage, insurance, or other financial services operation. Front running Entering