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Glossary of financial terms - Letter P

  • P/B

    Tags:  fundamental analysis ratios

    See  


  • P/E

    Tags:  equities valuation and pricing

    See  


  • P2P

    Tags:  concept corporate finance

    See  


  • PA

    Tags:  market participants status

    See  


  • par

    Tags:  financial instruments market quotation

    The face value of a stock or bond. Also called par value.

     


  • par asset swap

    Tags:  financial instruments interest rate derivatives

    In a par

    , the notional amount of the swap is equal to the face amount of the underlying asset. The asset is purchased at par and the investor receives par at maturity.

     


  • par swap

    Tags:  financial instruments interest rate derivatives

    A swap in which the present value of the fixed leg cashflows is equal to the present value of the floating leg cashflows (it has an NPV of zero).

     


  • path-dependent option

    Tags:  options typology

    Option whose value at expiry is function of the price history of the underlying asset during the life of the option, rather than just the price of the underlying at expiry. Hence, the option's final value depends on the path taken by the underlying in terms of market price.

     


  • path to profitability (P2P)

    Tag:  corporate finance

    Path to profitability is a concept that describes a clearly defined route for taking an enterprise from startup to generating a profit. It is generally outlined in the enterprise's business plan.

     


  • pay-fixed swaption

    Tags:  financial instruments interest rate derivatives

    See  


  • payer swaption

    Tags:  financial instruments interest rate derivatives

    See  


  • paying agent

    Tags:  interest rate instruments security issuance

    An entity appointed by the issuer which is responsible for making the payment of interest and principal to the holders of a security on behalf of the issuer.

     


  • payment date

    Tags:  characteristics market transactions

    The date that actual principal and interest payments are made to the registered owner of a security.

     


  • Payment Services Directive (PSD)

    Tags:  financial system texts of law

    The Payment Services Directive is a directive to regulate payment services and payment service providers in the European Union and the European Economic Area. It went into force in 2007 and was replaced by the new directive PSD2 in January 2018.

     


  • payout fund

    Tags:  asset management typology

    See  


  • payout ratio

    Tags:  equities pricing and analysis

    See  


  • PBR

    Tags:  fundamental analysis ratios

    See  


  • PCP

    Tags:  concept options pricing and analysis

    See  


  • PEP

    Tags:  illicit activities status

    See  


  • PER

    Tags:  equities fundamental analysis metric pricing and analysis ratios

    See  


  • performance attribution

    Tags:  asset management valuation and pricing

    Performance attribution is a set of techniques the objective of which is to explain the active return, which is the difference between a portfolio's return and the return of its benchmark.

     


  • perp

    Tags:  bonds typology

    See  


  • perpetual bond

    Tags:  bonds typology

    Perpetual bonds are fixed income securities which are not redeemable, i.e. they do not have a maturity date.

     


  • PF

    Tags:  characteristics financial instruments

    See  


  • pfandbrief

    Tag:  bonds

    Pfandbriefe are covered bonds issued by German mortgage banks and . They are collateralized by long-term assets such as property mortgages or public sector loans. They are regulated by special legislation, the Pfandbrief Act, and make up the largest and most established covered bond market in Europe.

     


  • PIPE

    Tags:  market transactions stock markets

    Countries:   Australia, Canada, United Kingdom, United States of America

    See  


  • pit broker

    Tags:  financial organisations market participants

    See  


  • placing

    Tags:  interest rate instruments security issuance

    An issue of securities where the issuing house places the securities directly with it’s own clients rather than inviting applications from elsewhere.

     


  • plain vanilla

    Tags:  derivatives typology

    See  


  • PLC

    Tags:  corporate finance status

    Country:   United Kingdom

    See  


  • PO

    Tags:  bonds financial instruments typology

    See  


  • POA

    Tags:  concept finance (general)

    See  


  • politically exposed person (PEP)

    Tags:  illicit activities status

    In financial regulation, a "politically exposed person" someone who has been entrusted with a prominent public function and therefore generally presents a higher risk for potential involvement in bribery and corruption by virtue of the position and the influence they may hold.

     


  • pool factor (PF)

    Tags:  characteristics securitisation

    A pool factor is the measure of how much of the initial principal of underlying loans remains in an asset-backed security transaction, mostly in the case of mortgage-backed securities.

     


  • POP

    Tags:  equities security issuance

    See  


  • POR

    Tags:  equities pricing and analysis

    See  


  • power of attorney (POA)

    Tags:  documents and publications economy finance (general)

    A power of attorney is a legal document by which one person empowers another person to represent him/her or to act on his/her behalf in private affairs, business, or some other legal matter.

     


  • PPI

    Tags:  economy indicators

    See  


  • PPP

    Tags:  concept economy

    See  


  • preceding

    Tags:  financial instruments market conventions

    See  


  • preferred stock

    Tags:  equities typology

    Preferred stock is a hybrid type of security in that it has characteristics from both bonds and equity. They usually pay their owners a fixed dividend, but do not entitle them to voting rights which a common stock offers.

     


  • premium

    Tags:  options valuation and pricing

    The price paid by a buyer to purchase an option. It represents the probability weighted intrinsic value of the option discounted back to today.

     


  • prepayment

    Tags:  concept securitisation

    The unscheduled partial or complete payment of the principal amount outstanding on a debt obligation before it is due.

     


  • prepayment risk

    Tags:  concept risk management

    Refers to the risk in classic mortgage backed securities that the mortgages in the pool will be repaid by borrowers quicker than expected (probably because interest rates have fallen making it attractive to repay fixed rate mortgages).

     


  • present value

    Tags:  concept time value of money

    The current value of a cash amount or a series of cash flows to be paid or received in the future. The present value is obtained by discounting the amount or cash flows at a given rate of return.

     


  • present value factor

    Tags:  concept time value of money

    The present value factor is the scaling factor which, when multiplied by a future cashflow gives the value of that cashflow today.

     


  • price-earnings ratio (PER)

    Tags:  equities fundamental analysis metric pricing and analysis ratios

    The price-earnings ratio is the relationship between a company's stock price and its earnings per share.

     


  • price-to-book ratio (P/B)

    Tags:  fundamental analysis ratios

    The price-to-book ratio, or P/B ratio, is a financial ratio which examines a company's market capitalisation in relation to its book value as shown on its balance sheet.

     


  • price-to-equity ratio

    Tags:  fundamental analysis ratios

    See  


  • price tick

    Tags:  characteristics financial instruments

    See  


  • price value of a basis point (PVBP)

    Tags:  bonds pricing and analysis

    A bond's PVBP measures the change in the price of a bond if the yield changes by 1 basis point.

     


  • pricing supplement

    Tags:  interest rate instruments security issuance

    A document containing the specific terms and conditions of a security issued under a programme. It may also be referred to as Final Terms.

     


  • primary market

    Tags:  concept financial markets

    The primary market is the financial market on which newly issued securities are sold from the issuer, or the issuing syndicate, to investors.

     


  • principal-only (PO)

    Tags:  bonds financial instruments

    Principal only is a strip that results from the stripping of a coupon bond, and represents the cash flow from the redemption of the principal amount at maturity.

     


  • principal paying agent

    Tags:  interest rate instruments security issuance

    The principal paying agent is responsible for collecting the money due from the issuer and for coordinating the distribution of payments through the sub-paying agents, to the holders of the issue, on demand.

     


  • principal risk

    Tag:  risk management

    Principal risk is the risk of losing the full value involved in a transaction, typically as a result of the default or insolvency of the counterparty.

     


  • private investment in public equity (PIPE)

    Tags:  corporate finance financing

    A private investment in public equity is the selling of publicly traded shares to private investors which does not take place through a public offering in a stock exchange.

     


  • private placement

    Tags:  financial instruments security issuance

    The sale of securities directly to private investors, institutional investors or both outside a public offering.

     


  • producer price index (PPI)

    Tags:  economy indicators

    A producer price index measures the average changes in prices which domestic producers receive for their output.

     


  • Profit Before Interest and Taxes (PBIT)

    Tags:  financial analysis metric

    See  


  • programme

    Tags:  corporate actions interest rate instruments

    A facility used by both the issuer and the issuing and paying agent to simplify the procedure of creating securities. The programme provides a template for a series of separate issuances for qhich the specific details (e.g. interest rate, tenor, issue amount) will vary.

     


  • proprietary information agreement (PIA)

    Tag:  documents and publications

    See  


  • prospectus

    Tags:  interest rate instruments security issuance

    Document published by the issuer in relation to a new stand-alone issue and made available to prospective investors.

     


  • PSA

    Tags:  interest rate markets organisations or institutions

    See  


  • PSD

    Tags:  financial system texts of law

    Territory:   European Union

    See  


  • public finance

    Tags:  activities and occupations finance (general)

    Public finance is the study of the income (through taxes and borrowing) and expenditures of the State.

     


  • public float

    Tags:  corporate finance valuation and pricing

    See  


  • public limited company (PLC)

    Tags:  corporate finance risk management

    A public limited company, abbreviated PLC, is a type of public, limited liability company in the United Kingdom, some Commonwealth countries, and the Republic of Ireland.

     


  • public offering price (POP)

    Tags:  equities security issuance

    The public offering price is the price at which a new stock issue is offered to the public.

     


  • Public Securities Association (PSA)

    Tags:  interest rate markets organisations or institutions

    The Public Securities Association was an international trade association representing the bond market industry.

     


  • public takeover bid

    Tags:  corporate actions equities

    A public takeover bid is the announcement of company A to the shareholders of company B stating its intention to acquire all of B’s shares at a certain price and over a given period of time in order to gain control of its business.

     


  • purchasing power parity (PPP)

    Tags:  concept economy

    Purchasing power parity (PPP) is a neoclassical economic theory that states that two currencies are in equilibrium when their exchange rate equalises the purchasing power by eliminating the differences in price levels between countries.

     


  • put

    Tags:  options typology

    See  


  • put-call parity

    Tags:  options valuation and pricing

    Expression referring to the relationship between the price of calls, puts and the underlying. Buying a call, selling the underlying asset and investing the present value of the strike should be equal to the value of a put. It is therefore possible to use this relationship to calculate put values.

     


  • put option

    Tags:  options typology

    A financial option which gives its owner the right, but not the obligation, to sell a fixed amount or quantity of the underlying asset at a specific price (strike) and at (European style) or over (American style) a given time.

     


  • PV

    Tags:  financial mathematics time value of money

    See  


  • PVBP

    Tags:  bond markets pricing and analysis

    See  


  • PVf

    Tags:  financial mathematics time value of money

    See  


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