| Term | Definition |
|---|---|
| P-Test | A statistical test |
| P-Value | The probability of obtaining results as extreme as the observed results |
| Pac-Man Defense | A takeover defense strategy |
| Paga | A Nigerian mobile money platform |
| Paid-In Capital | The amount of capital paid in by shareholders |
| Paid-Up Additional Insurance | Additional insurance purchased with dividends |
| Paid-Up Capital | Same as Paid-In Capital |
| Painting the Tape | A form of market manipulation |
| Paper Money | Currency issued by a government |
| Paper Trade | A simulated trade |
| Par | The face value of a bond |
| Par Value | Same as Par |
| Par Yield Curve | A yield curve constructed from par bonds |
| Parabolic SAR (Stop and Reverse) Indicator | A technical indicator |
| Paradox of Thrift | The idea that increased saving can lead to decreased economic activity |
| Parent Company | A company that owns a controlling interest in another company |
| Pareto Analysis | A statistical technique used for decision-making |
| Pareto Efficiency | A state where it is impossible to make one individual better off without making another worse off |
| Pareto Improvement | A change that makes at least one individual better off without making another worse off |
| Pareto Principle | The 80/20 rule |
| Pari-passu | Equally |
| Parity | Equality |
| Parity Price | The price at which two assets are equal in value |
| Parsonage Allowance | A tax benefit for clergy members |
| Participating Policy | An insurance policy that pays dividends |
| Participating Preferred Stock | Preferred stock that participates in dividends |
| Participation Rate | The percentage of the population that is in the labor force |
| Participatory Note | A financial instrument used by hedge funds |
| Partnership | A type of business organization |
| Passive Activity Loss Rules | Rules that limit the deductibility of losses from passive activities |
| Passive Foreign Investment Company (PFIC) | A foreign corporation that earns a certain percentage of its income from passive investments |
| Passive Income | Income from investments or rental property |
| Passive Investing | An investment strategy that tracks a market index |
| Past Due | A loan payment that has not been made |
| Patent | A legal right granted for an invention |
| PATH Act | A U.S. law related to taxes |
| Path Dependency | The idea that past events can influence future events |
| Patriot Act | A U.S. law intended to combat terrorism |
| Pattern Day Trader | A stock trader who executes four or more day trades in five business days |
| Pay Yourself First | A personal finance strategy |
| Payable On Death (POD) | A designation on a bank account that allows the funds to be transferred upon death |
| Payback Period | The length of time it takes for an investment to generate enough cash flow to recoup its initial cost |
| Payday Loan | A short-term, high-interest loan |
| Payee | The recipient of a payment |
| Payment | The transfer of money |
| Payment-in-Kind (PIK) | Payment made in assets rather than cash |
| Payout | A distribution of funds |
| Payout Ratio | The percentage of earnings paid out as dividends |
| PayPal | An online payment platform |
| Payroll | The process of paying employees |
| Payroll Tax | Taxes withheld from employee paychecks |
| P/E 10 Ratio | A valuation metric |
| Peer Group | A group of similar companies |
| Peer-to-Peer (P2P) Economy | An economy based on peer-to-peer transactions |
| Peer-to-Peer Lending | Lending money directly to individuals or businesses |
| Pegging | Fixing the exchange rate of a currency |
| Pell Grant | A U.S. government grant for students |
| Penetration Pricing | A pricing strategy that involves setting a low price to attract customers |
| Pennant | A chart pattern |
| Penny Stock | A very low-priced stock |
| Pension Plan | A retirement plan |
| Per Capita | Per person |
| Per Capita GDP | GDP divided by the population |
| Per Stirpes | A way of distributing property to heirs |
| Perceived Value | The value a customer believes they are receiving |
| Percentage Change | The change in a value expressed as a percentage |
| Percentage of Completion Method | An accounting method used for long-term contracts |
| Perfect Competition | A market structure with many buyers and sellers |
| Performance Bonds | Bonds that guarantee the completion of a project |
| Performance Budget | A budget that focuses on outcomes |
| Performance Management | The process of setting goals and evaluating performance |
| Periodic Interest Rate | The interest rate applied to a loan or investment during a specific period |
| Permanent Income Hypothesis | A theory about consumption behavior |
| Permanent Life Insurance | Life insurance that provides coverage for the entire life of the insured |
| Perpetual Bond | A bond with no maturity date |
| Perpetual Inventory | An inventory system that tracks inventory levels in real time |
| Perpetuity | A stream of cash flows that continues forever |
| Perseroan Terbatas (PT) | An Indonesian term for a limited liability company |
| Personal Consumption Expenditures (PCE) | A measure of consumer spending |
| Personal Finance | The management of one’s personal finances |
| Personal Financial Specialist (PFS) | A professional designation for financial advisors |
| Personal Financial Statement | A statement of one’s assets and liabilities |
| Personal Guarantee | A guarantee by an individual to repay a debt |
| Personal Identification Number (PIN) | A code used to access an account |
| Personal Income | Income received by individuals |
| Personal Lines Insurance | Insurance for individuals and families |
| Personal Property | Movable property |
| Personal Service Corporation | A corporation that provides personal services |
| Personally Identifiable Information (PII) | Information that can be used to identify an individual |
| PEST Analysis | A framework for analyzing the political, economic, social, and technological factors that affect a business |
| Peter Principle | The idea that people are promoted to their level of incompetence |
| Petrodollars | U.S. dollars earned from oil sales |
| Petroleum | A fossil fuel |
| Petty Cash | A small amount of cash kept on hand |
| Phantom Stock Plan | A type of employee compensation plan |
| Philanthropy | Charitable giving |
| Phillips Curve | A relationship between inflation and unemployment |
| Physical Capital | Tangible assets used in production |
| Pigovian Tax | A tax on negative externalities |
| PIIGS | A derogatory acronym for some European countries |
| PIMCO | A investment management firm |
| Pink Sheets | A market for very small, thinly traded companies |
| Piotroski Score | A value investing strategy |
| Pip | The smallest unit of price movement in forex trading |
| Pitchbook | A presentation used to market a deal |
| Pivot Point | A technical indicator |
| Plain Vanilla | A simple, standard financial instrument |
| Planned Obsolescence | A strategy of designing products to become obsolete |
| Platinum | A precious metal |
| Platykurtic | A type of distribution |
| Pledged Asset | An asset used as collateral |
| Plowback Ratio | The percentage of earnings retained by a company |
| Plunge Protection Team (PPT) | A group of officials who are believed to intervene in financial markets |
| Point-and-Figure (P&F) Chart | A type of chart used in technical analysis |
| Point of Purchase (POP) | The place where a sale is made |
| Point of Sale (POS) | Same as Point of Purchase |
| Poison Pill | A takeover defense strategy |
| Poisson Distribution | A probability distribution |
| Political Action Committee (Super PAC) | An organization that raises and spends money to influence elections |
| Political Economy | The study of the interaction between politics and economics |
| Political Risk | The risk of losses due to political instability |
| Ponzi Scheme | A fraudulent investment scheme |
| Pooled Funds | Funds from multiple investors that are pooled together |
| Population Statistics | Data about a population |
| Pork Barrel Politics | The use of government funds for local projects |
| Porter Diamond | A framework for analyzing national competitive advantage |
| Porter’s 5 Forces | A framework for analyzing industry competition |
| Portfolio Investment | Investment in financial assets |
| Portfolio Management | The process of managing a portfolio of investments |
| Portfolio Manager | A person who manages a portfolio of investments |
| Portfolio of Financial Assets | A collection of financial assets |
| Portfolio Runoff | The decline in the value of a portfolio due to maturing assets |
| Portfolio Turnover | The rate at which assets in a portfolio are bought and sold |
| Portfolio Variance | A measure of the risk of a portfolio |
| Position Trader | A trader who holds positions for long periods of time |
| Positive Correlation | A relationship between two variables where they move in the same direction |
| Positive Economics | Economic analysis that is objective and fact-based |
| Positive Pay | A fraud prevention service offered by banks |
| Post-Money Valuation | The value of a company after an investment |
| Post-Trade Processing | The activities that occur after a trade is executed |
| Posterior Probability | A probability that is updated based on new information |
| Poverty | The state of being extremely poor |
| Term | Definition |
|---|---|
| Poverty Trap | A situation where individuals are trapped in poverty |
| Power Distance Index (PDI) | A measure of how accepting a society is of power inequalities |
| Power of Attorney | A legal document that grants someone the authority to act on another’s behalf |
| Pre-Foreclosure | The period before a foreclosure is finalized |
| Pre-IPO | Before an initial public offering |
| Pre-Market | Trading that occurs before the regular trading session |
| Predatory Pricing | The practice of setting prices below cost to drive competitors out of business |
| Preemptive Rights | The right of existing shareholders to maintain their proportional ownership in a company |
| Preference Shares | Preferred stock |
| Preferred Dividend | The dividend paid on preferred stock |
| Preferred Provider Organizations (PPO) | A type of health insurance plan |
| Preferred Stock | A type of stock that pays a fixed dividend |
| Premium | The price of an option or insurance policy |
| Premium Bond | A bond that trades at a premium |
| Prepaid Credit Card | A credit card that is loaded with a specific amount of money |
| Prepaid Expense | An expense that has been paid in advance |
| Prepayment | Paying off a loan or mortgage early |
| Prepayment Penalty | A fee charged for prepaying a loan or mortgage |
| Prepayment Risk | The risk that a loan or mortgage will be prepaid |
| Present Value | The current value of a future sum of money |
| Present Value Interest Factor (PVIF) | A factor used to calculate present value |
| Present Value Interest Factor of Annuity (PVIFA) | A factor used to calculate the present value of an annuity |
| Present Value of an Annuity | The current value of a stream of future payments |
| Preservation of Capital | An investment objective that focuses on maintaining the original investment |
| Press Conference | A meeting with reporters |
| Pretax Earnings | Earnings before taxes |
| Pretax Profit Margin | A measure of profitability |
| Price Action | The movement of a security’s price |
| Price Ceiling | A maximum price set by the government |
| Price Controls | Government restrictions on prices |
| Price Discovery | The process of determining the price of a security |
| Price Discrimination | Charging different prices to different customers |
| Price/Earnings-to-Growth (PEG) Ratio | A valuation metric |
| Price Elasticity of Demand | A measure of how sensitive demand is to price changes |
| Price Fixing | An illegal agreement between competitors to set prices |
| Price Leadership | A situation where one company sets prices and others follow |
| Price Level | The average price of goods and services |
| Price Rate of Change Indicator (ROC) | A technical indicator |
| Price Sensitivity | Same as Price Elasticity of Demand |
| Price Skimming | A pricing strategy that involves setting a high price initially and then lowering it over time |
| Price Stickiness | The tendency for prices to remain constant |
| Price-Taker | A company that cannot influence market prices |
| Price Target | A predicted future price for a security |
| Price-to-Book Ratio (P/B Ratio) | A valuation metric |
| Price-to-Cash Flow Ratio | A valuation metric |
| Price-to-Earnings Ratio (P/E Ratio) | A valuation metric |
| Price to Free Cash Flow | A valuation metric |
| Price-to-Rent Ratio | A ratio used to assess the relative attractiveness of renting versus buying a home |
| Price-to-Sales (P/S) | A valuation metric |
| Price to Tangible Book Value (PTBV) | A valuation metric |
| Price Value of a Basis Point (PVBP) | A measure of the change in the value of a bond for a one basis point change in yield |
| Price-Weighted Index | A stock market index where component stocks are weighted by price |
| Prima Facie | On the face of it |
| Primary Market | The market for new issues of securities |
| Prime Brokerage | Services provided by brokers to hedge funds |
| Prime Cost | The direct costs of production |
| Prime Rate | The interest rate that banks charge their most creditworthy customers |
| Principal | The original amount borrowed or invested |
| Principal-Agent Problem | A conflict of interest between a principal and an agent |
| Principal-Agent Relationship | The relationship between a principal and an agent |
| Principal, Interest, Taxes, Insurance (PITI) | The components of a mortgage payment |
| Prisoner’s Dilemma | A concept in game theory |
| Private Banking | Banking services for high-net-worth individuals |
| Private Company | A company that is not publicly traded |
| Private Equity | Investment in private companies |
| Private Equity Real Estate | Investment in private real estate |
| Private Finance Initiative | A way for governments to fund public projects |
| Private Good | A good that is excludable and rivalrous |
| Private Investment Fund | A fund that invests in private companies |
| Private Investment in Public Equity (PIPE) | An investment in a public company that is not made through a public offering |
| Private Placement | A sale of securities to a limited number of investors |
| Private Sector | The part of the economy that is owned by individuals and businesses |
| Privatization | The transfer of ownership from the public sector to the private sector |
| Privileged Communication | Communication that is protected by law |
| Pro Forma | A financial statement that projects future results |
| Pro Forma Invoice | An invoice provided before goods are shipped |
| Pro Rata | Proportionally |
| Probability Density Function (PDF) | A function that describes the probability of a continuous variable |
| Probability Distribution | A description of the probabilities of different outcomes |
| Probate | The legal process of administering a deceased person’s estate |
| Probate Court | A court that handles probate matters |
| Procurement | The process of acquiring goods or services |
| Procyclic | Moving in the same direction as the economy |
| Producer Price Index (PPI) | A measure of wholesale inflation |
| Producer Surplus | The difference between the price producers receive and the minimum price they are willing to accept |
| Product Differentiation | Making a product distinct from its competitors |
| Product Life Cycles | The stages a product goes through from introduction to decline |
| Product Line | A group of related products |
| Product Portfolio | The collection of products offered by a company |
| Production Costs | The costs of producing goods or services |
| Production Efficiency | Producing goods or services at the lowest possible cost |
| Production Possibility Frontier (PPF) | A graph showing the maximum combinations of goods and services that can be produced |
| Productivity | The amount of output produced per unit of input |
| Profit | Revenue minus expenses |
| Profit and Loss Statement (P&L) | A financial statement that shows revenues and expenses |
| Profit Before Tax (PBT) | Profit before income taxes |
| Profit Centers | Parts of a business that generate profit |
| Profit Margin | A measure of profitability |
| Profit-Sharing Plan | A type of retirement plan |
| Profits Interest | A type of equity interest |
| Profitability Index (PI) | A measure of the profitability of an investment |
| Profitability Ratios | Ratios that measure profitability |
| Program Evaluation Review Technique (PERT) | A project management technique |
| Progress Billings | Billings for work in progress |
| Progressive Tax | A tax where the tax rate increases as income increases |
| Project Finance | Financing for large projects |
| Project Management | The process of planning and executing projects |
| Projected Benefit Obligation (PBO) | The present value of future pension benefits |
| Promissory Estoppel | A legal doctrine |
| Promissory Note | A written promise to repay a debt |
| Promoter | A person who starts a company |
| Promotion | The process of communicating with potential customers |
| Proof of Funds (POF) | Documentation that shows someone has sufficient funds |
| Proof-of-Stake (PoS) | A consensus mechanism used in blockchain technology |
| Proof of Work (PoW) | A consensus mechanism used in blockchain technology |
| Property | Real estate or personal belongings |
| Property Insurance | Insurance that covers damage to property |
| Property Management | The management of rental properties |
| Property, Plant, and Equipment (PP&E) | Tangible assets used in a business |
| Property Rights | The right to own and use property |
| Property Tax | A tax on real estate |
| Property Tax Deduction | A deduction for property taxes paid |
| Proportional Tax | A tax where the tax rate is the same for all income levels |
| Proprietary Trading | Trading by a financial institution for its own account |
| Proration | The allocation of expenses or income |
| Prospect Theory | A theory about decision-making under risk |
| Prospectus | A document that describes a securities offering |
| Protectionism | The policy of protecting domestic industries from foreign competition |
| Protective Put | A strategy that involves buying a put option to protect a long position |
| Provident Fund | A retirement savings plan common in some countries |
| Provision | An expense that has been set aside for a future liability |
| Provision for Credit Losses (PCL) | An expense set aside to cover potential loan losses |
| Proxy | A document that authorizes someone to vote on behalf of a shareholder |
| Term | Definition |
|---|---|
| Proxy Fight | A battle for control of a company |
| Proxy Statement | A document sent to shareholders before a proxy vote |
| Proxy Vote | A vote cast by a proxy |
| Public Company | A company that is publicly traded |
| Public Company Accounting Oversight Board (PCAOB) | A board that oversees the audits of public companies |
| Public Good | A good that is non-excludable and non-rivalrous |
| Public Limited Company (PLC) | A type of company in the UK |
| Public-Private Partnerships | Collaborations between the public and private sectors |
| Pullback | A temporary decline in a stock price |
| Pump-and-Dump Scheme | A type of market manipulation |
| Pump Priming | Government spending intended to stimulate the economy |
| Purchase Annual Percentage Rate (APR) | The annual interest rate on purchases made with a credit card |
| Purchasing Managers’ Index (PMI) | A measure of manufacturing activity |
| Purchase Money Security Interest (PMSI) | A security interest in goods purchased with borrowed money |
| Purchase-Money Mortgage | A mortgage used to finance the purchase of a property |
| Purchase Price | The price paid for an asset |
| Purchasing Power | The ability to buy goods and services |
| Pure Play | A company that focuses on a single line of business |
| Pure Risk | A risk with only the possibility of loss |
| Push Down Accounting | An accounting method used in acquisitions |
| Put | An option that gives the buyer the right to sell an asset |
| Put-Call Parity | A relationship between the prices of put and call options |
| Put-Call Ratio | The ratio of put options to call options |
| Put Option | Same as Put |
| Pyramid Scheme | A fraudulent investment scheme |