P/E effect: That portfolios with low P/E stocks have exhibited higher average risk ...

P/E ratio: Assume Deutsche Bank sells for €25.50 per share and has earned €2.55 p ...

P&L: Profit and loss statement for a trader.

P&S: Purchase and sale statement. A statement provided by the broker showin ...

PAB: Balboa from Panama.

Pac-Man strategy: Takeover defense strategy in which the prospective acquiree retaliates ...

Packs: Variations of strip trades whereby a trader or risk manager can place ...

Painting the Tape: Refers to activities which give the impression of increased volume and ...

Pairoff: A buy-back to offset and effectively liquidate a prior sale of securit ...

Paper: Money market instruments, commercial paper and other.

Paper gain (loss): Unrealized capital gain (loss) on securities held in portfolio, based ...

Par value: Also called the maturity value or face value, the amount that the issu ...

Parallel loan: A process whereby two companies in different countries borrow each oth ...

Parallel shift in the yield curve: A shift in the yield curve in which the change in the yield on all mat ...

Parameter: A representation that characterizes a part of a model (e.g. a growth r ...

PARs: Par bonds (PARs) can be exchanged dollar for dollar for existing debt. ...

Partial Fill: The result where only a portion of an order was filled. For example, l ...

Participating fees: The portion of total fees in a syndicated credit that go to the partic ...

Participating GIC: A guaranteed investment contract where the policyholder is not guarant ...

Partnership: Shared ownership among two or more individuals, some of whom may, but ...



Pass-through coupon rate: The interest rate paid on a securitized pool of assets, which is less ...

Pass-through rate: The net interest rate passed through to investors after deducting serv ...

Pass-through securities: A pool of fixed-income securities backed by a package of assets (i.e. ...

Passive investment management: Buying a well-diversified portfolio to represent a broad-based market ...

Passive portfolio: A market index portfolio.

Passive portfolio strategy: A strategy that involves minimal expectational input, and instead reli ...

Path dependent option: An option whose value depends on the sequence of prices of the underly ...

Pay-up: The loss of cash resulting from a swap into higher price bonds or the ...

Payable through drafts: A method of making payment that is used to maintain control over payme ...

Payback: The length of time it takes to recover the initial cost of a project, ...

Paydown: In a Treasury refunding, the amount by which the par value of the secu ...

PAYE (Pay-As-You-Earn): PAYE is a scheme for the collection of income tax due from the earning ...

Payment date: The date on which each shareholder of record will be sent a check for ...

Payment float: Company-written checks that have not yet cleared.

Payment-In-Kind (PIK) bond: A bond that gives the issuer an option (during an initial period) eith ...

Payments netting: Reducing fund transfers between affiliates to only a netted amount. Ne ...

Payments pattern: Describes the lagged collection pattern of receivables, for instance t ...

Payout ratio: Generally, the proportion of earnings paid out to the common stockhold ...

Peak: The transition from the end of an economic expansion to the start of a ...

Pecking-order view (of capital structure): The argument that external financing transaction costs, especially tho ...



Pegging: Effecting commodity transactions to prevent a decline in the price of ...

PEI: Inti from Peru. Currently, the unit of currency in Peru is the nuevo s ...

PEN: New Sol (nuevo sol) from Peru. The unit of currency in Peru is the nue ...

Pension Benefit Guaranty Corporation (PBGC): A federal agency that insures the vested benefits of pension plan par ...

Pension plan: A fund that is established for the payment of retirement benefits.

Pension sponsors: Organizations that have established a pension plan.

Perfect capital market: A market in which there are never any arbitrage opportunities.

Perfect competition: An idealized market environment in which every market participant is t ...

Perfect hedge: A financial result in which the profit and loss from the underlying as ...

Perfect market view (of capital structure): Analysis of a firm's capital structure decision, which shows the irre ...

Perfect market view (of dividend policy): Analysis of a decision on dividend policy, in a perfect capital marke ...

Perfected first lien: A first lien that is duly recorded with the cognizant governmental bod ...

Perfectly competitive financial markets: Markets in which no trader has the power to change the price of goods ...

Performance attribution analysis: The decomposition of a money manager's performance results to explain ...

Performance evaluation: The evaluation of a manager's performance which involves, first, deter ...

Performance measurement: The calculation of the return realized by a money manager over some ti ...

Performance Related Pay: Performance Related pay is a remuneration system whereby the employee' ...

Performance shares: Shares of stock given to managers on the basis of performance as measu ...

Perpetual warrants: Warrants that have no expiration date.

Perpetuity: A perpetuity is a stream of payments or a type of annuity that starts ...



Perquisites: Personal benefits, including direct benefits, such as the use of a fir ...

Personal tax view (of capital structure): The argument that the difference in personal tax rates between income ...

Personal trust: An interest in an asset held by a trustee for the benefit of another p ...

Petty Cash: Minor amount of money held by a person or business to pay for small mi ...

PGK: Kina from Papua New Guinea.

Philadelphia Stock Exchange (PHLX): A securities exchange where American and European foreign currency op ...

Phone switching: In mutual funds, the ability to transfer shares between funds in the s ...

PHP: Philippines Peso from Philippines.

PIBOR: The Paris Interbank Offered Rate.

PIBOR (Paris Interbank Offer Rate): The deposit rate on interbank transactions in the Eurocurrency market ...

Pickup: The gain in yield that occurs when a block of bonds is swapped for ano ...

Pickup: The enhancement in yield or income relative to a comparable treasury i ...

Picture: The bid and asked prices quoted by a broker for a given security.

Pie model of capital structure: A model of the debt/equity ratio of the firms, graphically depicted in ...

Pin: The at-the-money strike price, particularly at an option's expiration.

Pin Risk: The uncertainty that an option position may be exercised into the unde ...

Pink Sheets: The daily report which lists interdealer quotes for over-the-counter s ...

Pink-collar worker: A pink-collar worker does work traditionally mostly done by women. Thi ...

Pipeline: A type of risk often associated with mortgages. It occurs from the tim ...

Pit: A specific area of the trading floor that is designed for the trading ...

Pit committee: A committee of the exchange that determines the daily settlement price ...

Pivot: Price level established as being significant by market's failure to pe ...

PKR: Pakistani Rupee from Pakistan.

Placement: A bank depositing Eurodollars with (selling Eurodollars to) another ba ...

Plain vanilla: A term that refers to a relatively simple derivative financial instrum ...

Plain vanilla bond: A typical ‘plain vanilla’ bond issued in the United States specifies ( ...

Plan for reorganization: A plan for reorganizing a firm during the Chapter 11 bankruptcy proces ...

Plan sponsors: The entities that establish pension plans, including private business ...

Planned Amortization Class: A security which is structured to have a reasonable life expectancy pr ...

Planned amortization class CMO: (a) One class of CMO that carries the most stable cash flows and the l ...

Planned capital expenditure program: Capital expenditure program as outlined in the corporate financial pl ...

Planned financing program: Program of short-term and long-term financing as outlined in the corpo ...

Planning horizon: The length of time a model projects into the future.

Platykurtic (Platykurtosis): Describes the relatively flat condition for a distribution. This condi ...

PLC (Public Limited Company): Under UK law there must be a minimum of seven shareholders in a PLC. T ...

PLN: New Zloty from Poland.

Plug: A variable that handles financial slack in the financial plan.

Plus: Dealers in government bonds normally give price quotes in 32nds. To qu ...

Point: A measure of price change equal to 1/100 of one cent in most futures t ...

Point and figure chart: A price-only chart that takes into account only whole integer changes ...

Point-And-Figure: A method of charting which uses prices to form patterns of movement wi ...

Poison pill: Anit-takeover device that gives a prospective acquiree's shareholders ...

Poison put: A covenant allowing the bondholder to demand repayment in the event of ...

Policy asset allocation: A long-term asset allocation method, in which the investor seeks to as ...

Political risk: Possibility of the expropriation of assets, changes in tax policy, res ...

Pool factor: The outstanding principal balance divided by the original principal ba ...

Pooling: The combination of different loans into standardized or predefined uni ...

Pooling of interests: An accounting method for reporting acquisitions accomplished through t ...

Portfolio: A collection of investments, real and/or financial.

Portfolio insurance: A strategy using a leveraged portfolio in the underlying stock to crea ...

Portfolio internal rate of return: The rate of return computed by first determining the cash flows for al ...

Portfolio opportunity set: The expected return/standard deviation pairs of all portfolios that ca ...

Portfolio separation theorem: An investor's choice of a risky investment portfolio is separate from ...

Portfolio turnover rate: For an investment company, an annualized rate found by dividing the le ...

Portfolio variance: Weighted sum of the covariance and variances of the assets in a portfo ...

Position: A market commitment; the number of contracts bought or sold for which ...

Position diagram: Diagram showing the possible payoffs from a derivative investment.

Position liquidation: The closing out of a long position. The term is sometimes used to deno ...

Positive Carry: The condition whereby a portfolio after financing considerations still ...

Positive convexity: A property of option-free bonds whereby the price appreciation for a l ...

Positive covenant (of a bond): A bond covenant that specifies certain actions the firm must take. Als ...

Possessions corporation: A type of corporation permitted under the U.S. tax code whereby a bran ...

Post: Particular place on the floor of an exchange where transactions in sto ...

Post-audit: A set of procedures for evaluating a capital budgeting decision after ...

Postponement option: The option of postponing a project without eliminating the possibility ...

Posttrade benchmarks: Prices after the decision to trade.

Power Cap: A derivative that pays off from the long's perspective in an exponenti ...

Power Grid™: A matrix which enables an analyst, investor, portfolio or risk manager ...

Pre-trade benchmarks: Prices occurring before or at the decision to trade.

Preauthorized checks (PACs): Checks that are authorized by the payer in advance and are written eit ...

Preauthorized electronic debits (PADs): Debits to its bank account in advance by the payer. The payer's bank ...

Precautionary demand (for money): The need to meet unexpected or extraordinary contingencies with a buf ...

Precautionary motive: A desire to hold cash in order to be able to deal effectively with une ...

Precious Metals: Refer to Gold, Palladium, Platinum and Silver from a futures or bullio ...

Precious Metals Lease: A vehicle or technique used to finance precious metals inventories. It ...

Preemptive right: Common stockholder's right to anything of value distributed by the com ...

Preference stock: A security that ranks junior to preferred stock but senior to common s ...

Preferred equity redemption stock (PERC): Preferred stock that converts automatically into equity at a stated d ...

Preferred habitat theory: A biased expectations theory that believes the term structure reflects ...

Preferred shares: Preferred shares give investors a fixed dividend from the company's ea ...

Preferred stock: A security that shows ownership in a corporation and gives the holder ...

Preferred Stock: An (equity) security which has a priority relative to ordinary common ...

Preferred stock agreement: A contract for preferred stock.

Preliminary prospectus: A preliminary version of a prospectus.

Premium: (a) Amount paid for a bond above the par value. (b) The price of an op ...

Premium bond: A bond that is selling for more than its par value.

Premium income: The income made by an insurance company resulting from premiums paid f ...

Prepackaged bankruptcy: A bankruptcy in which a debtor and its creditors pre-negotiate a plan ...

Prepayment speed: Also called speed, the estimated rate at which mortgagors pay off thei ...

Prepayments: Payments made in excess of scheduled mortgage principal repayments.

Present value: The amount of cash today that is equivalent in value to a payment, or ...

Present value factor: Factor used to calculate an estimate of the present value of an amount ...

Present value of growth opportunities (PVGO): The net present value (NPV) of investments the firm is expected to mak ...

Presold issue: An issue that is sold out before the coupon announcement.

Price compression: The limitation of the price appreciation potential for a callable bond ...

Price discovery process: The process of determining the prices of the assets in the marketplace ...

Price discrimination: Price discrimination occurs whenever a firm charges differential price ...

Price elasticity: The percentage change in the quantity divided by the percentage change ...

Price risk: The risk that the value of a security (or a portfolio) will decline in ...

Price takers: Individuals who respond to rates and prices by acting as though they h ...

Price value of a basis point (PVBP): Also called the dollar value of a basis point, a measure of the change ...

Price-specie-flow mechanism: Adjustment mechanism under the classical gold standard whereby distur ...

Price-volume relationship: A relationship espoused by some technical analysts that signals contin ...

Price/earnings ratio: Shows the "multiple" of earnings at which a stock sells. Determined by ...

Price/sales ratio: Determined by dividing current stock price by revenue per share (adjus ...

Priced out: The market has already incorporated information, such as a low dividen ...

Prices: Price of a share of common stock on the date shown. Highs and lows are ...

Pricing efficiency: Also called external efficiency, a market characteristic where prices ...

Primary market: The first buyer of a newly issued security buys that security in the p ...

Primary offering: A firm selling some of its own newly issued shares to investors.

Prime rate: The interest rate at which banks lend to their best (prime) customers. ...

Primitive security: An instrument such as a stock or bond for which payments depend only o ...

Principal: The par or face value of a debt instrument

Principal of diversification: Highly diversified portfolios will have negligible unsystematic risk. ...

Principal only (PO): A mortgage-backed security (MBS) in which the holder receives only pri ...

Principal Orders: Principal orders refers to hte activity by a broker or dealer who buys ...

Principal value: The amount that the issuer of a bond agrees to repay the bondholder at ...

Principal-agent relationship: A situation that can be modeled as one person, an agent, who acts on t ...

Prisoner's dilemma: A game frequently displayed in cop dramas on the telly. Two partners i ...

Private Equity Fund: A fund that buys majority stakes in companies and/or entire business u ...

Private Export Funding Corporation (PEFCO): Company that mobilizes private capital for financing the export of bi ...

Private placement: The sale of a bond or other security directly to a limited number of i ...

Private unrequited transfers: Refers to resident immigrant workers' remittances to their country of ...

Privatization: The act of returning state-owned or state-run companies back to the pr ...

Pro forma capital structure analysis: A method of analyzing the impact of alternative capital structure cho ...

Pro forma financial statements: Financial statements as adjusted to reflect a projected or planned tra ...

Pro forma statement: A financial statement showing the forecast or projected operating resu ...

Probability: The relative likelihood of a particular outcome among all possible out ...

Probability density function: The probability function for a continuous random variable.

Probability distribution: Also called a probability function, a function that describes all the ...

Probability function: A function that assigns a probability to each and every possible outco ...

Probate: The legal process for the distribution of the estate of a decedent.

Product cycle: The time it takes to bring new and/or improved products to market.

Product risk: A type of mortgage-pipeline risk that occurs when a lender has an unus ...

Production payment financing: A method of nonrecourse asset-based financing in which a specified pe ...

Production-flow commitment: An agreement by the loan purchaser to allow the monthly loan quota to ...

Profit and Loss Account: An accounting statement that shows a company's trading position over a ...

Profit margin: Indicator of profitability. The ratio of earnings available to stockho ...

Profitability index: The present value of the future cash flows divided by the initial inve ...

Profitability ratios: Ratios that focus on the profitability of the firm. Profit margins mea ...

Proforma: This term is normally used in connection with invoices, whereby a comp ...

Program trades: Also called basket trades, orders requiring the execution of trades in ...

Program trading: Trades based on signals from computer programs, usually entered direct ...

Progress review: A periodic review of a capital investment project to evaluate its cont ...

Progressive tax: A tax that tends to take a smaller percentage of the incomes of lower ...

Progressive tax system: A tax system wherein the average tax rate increases for some increases ...

Project financing: A form of asset-based financing in which a firm finances a discrete se ...

Project loan certificate (PLC): A primary program of Ginnie Mae for securitizing FHA-insured and coins ...

Project loan securities: Securities backed by a variety of FHA-insured loan types - primarily m ...

Project loans: Usually FHA-insured and HUD-guaranteed mortgages on multiple-family ho ...

Project notes (PNs): Project notes are issued by municipalities to finance federally sponso ...

Projected benefit obligation (PBO): A measure of a pension plan's liability at the calculation date assumi ...

Projected maturity date: With CMOs, final payment at the end of the estimated cash flow window.

Promissory note: Written promise to pay.

Property rights: Rights of individuals and companies to own and utilize property as the ...

Prospectus: Formal written document to sell securities that describes the plan for ...

Protectionism: Protecting domestic industry from import competition by means of tarif ...

Protective covenant: A part of the indenture or loan agreement that limits certain actions ...

Protective put buying strategy: A strategy that involves buying a put option on the underlying securit ...

Provisional call feature: A feature in a convertible issue that allows the issuer to call the is ...

Proxy: Document intended to provide shareholders with information necessary t ...

Proxy contest: A battle for the control of a firm in which the dissident group seeks, ...

Proxy fight: A hostile takeover technique that may occurs when the acquiring compan ...

Proxy vote: Vote cast by one person on behalf of another.

PSA: A prepayment model based on an assumed rate of prepayment each month o ...

PTE: Portuguese Escudo (no longer in use) from Portugal. Replaced by the eu ...

Public goods (collective goods): These are a distinctive class of goods which cannot practically be wit ...

Public offering: The sale of registered securities by the issuer (or the underwriters a ...

Public Securities Administration (PSA): The trade association for primary dealers in US government securities ...

Public warehouse: Warehouse operated by an independent warehouse company on its own prem ...

Publicly traded assets: Assets that can be traded in a public market, such as the stock market ...

Puke: Slang for a trader selling a position, usually a losing position, as i ...

Purchase: To buy, to be long, to have an ownership position.

Purchase accounting: Method of accounting for a merger in which the acquirer is treated as ...

Purchase agreement: As used in connection with project financing, an agreement to purchase ...

Purchase and sale: A method of securities distribution in which the securities firm purch ...

Purchase fund: Resembles a sinking fund except that money is used only to purchase bo ...

Purchase method: Accounting for an acquisition using market value for the consolidation ...

Purchasing power parity (PPP): The notion that the ratio between domestic and foreign price levels sh ...

Pure Equity Trust: A special type of irrevocable trust marketed by promoters. The trust a ...

Pure expectations theory: A theory that asserts that the forward rates exclusively represent the ...

Pure index fund: A portfolio that is managed so as to perfectly replicate the performan ...

Pure Trust: A contractual trust as opposed to a statutory trust, created under the ...

Pure yield pickup swap: Moving to higher yield bonds.

Pure-discount bond: A bond that will make only one payment of principal and interest. Also ...

Put: An option granting the right to sell the underlying futures contract. ...

Put an option: To exercise a put option.

Put bond: A bond that the holder may choose either to exchange for par value at ...

Put option: This security gives investors the right to sell (or put) fixed number ...

Put price: The price at which the asset will be sold if a put option is exercised ...

Put provision: Gives the holder of a floating-rate bond the right to redeem his note ...

Put provision on bonds: A put provision grants the bondholder the right to sell the issue back ...

Put swaption: A financial tool in which the buyer has the right, or option, to enter ...

Put-call parity relationship: The relationship between the price of a put and the price of a call on ...

PYG: Guarani from Paraguay.

Pyramid scheme: An illegal, fraudulent scheme in which a con artist contrives victims ...

Did you know?

Conventional project

A project with a negative initial cash flow (cash outflow), which is expected to be followed by one or more future positive cash flows (cash inflows).


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