P, Q Flashcards
(50 cards)
Paper Profi t
An unrealized profit on a security still held.
Paper profits become realized profits only
when the security is sold. A paper loss is the
opposite to this.
Par Value
The stated face value of a bond or stock (as
assigned by the company’s charter)
expressed as a dollar amount per share. Par
value of a common stock usually has little
relationship to the current market value and
so no par value stock is now more common.
Par value of a preferred stock is significant
as it indicates the dollar amount of assets
each preferred share would be entitled to
should the company be liquidated.
Pari Passu
A legal term meaning that all securities
within a series have equal rank or claim on
earnings and assets. Usually refers to equally
ranking issues of a company’s preferred
shares
Participating Preferred
Preferred shares which, in addition to their
fixed rate of prior dividend, share with the
common in further dividend distributions
and in capital distributions above their par
value in liquidation.
Participation Rate
The share of the working-age population
(15 and older) that is in the labour market,
either working or looking for work.
Partnership
A form of business organization that
involves two or more people contributing
to the business and legislated under the
federal Partnership Act.
Past Service Pension Adjusted
PSPA
An employer may increase a member’s
pension by the granting of additional past
service benefits to an employee in a defined
benefit plan. Plan members who incur a
PSPA will have their RRSP contribution
room reduced by the amount of this
adjustment.
Payback Period
The time that it takes for a convertible
security to recoup its premium through its
higher yield, compared with the dividend
that is paid on the stock
Peer Group
A group of managed products (particularly
mutual funds) with a similar investment
mandate.
Pension Adjustment (PA)
The amount of contributions made or the
value of benefits accrued to a member of an
employer-sponsored retirement plan for a
calendar year. The PA enables the individual
to determine the amount that may be
contributed to an RRSP that would be in
addition to contributions into a Registered
Pension Plan.
Performance Bonds
What is often required upon entry into a
futures contract giving the parties to a
contract a higher level of assurance that the
terms of the contract will eventually be
honoured. The performance bond is often
referred to as margin
Personal Disposable Income
The amount of personal income an
individual has after taxes. The income that
can be spent on necessities, nonessential
goods and services, or that can be saved.
Phillips Curve
A graph showing the relationship between
inflation and unemployment. The theory
states that unemployment can be reduced
in the short run by increasing the price level
(inflation) at a faster rate. Conversely,
inflation can be lowered at the cost of
possibly increased unemployment and
slower economic growth.
Point
Refers to security prices. In the case of
shares, it means $1 per share. In the case of
bonds and debentures, it means 1% of the
issue’s par value, which is almost universally
100. On a $1,000 bond, one point
represents 1% of the face value of the bond
or $10. See Basic point
Political Risk
The risk associated with a government
introducing unfavourable policies making
investment in the country less attractive.
Political risk also refers to the general
instability associated with investing in a
particular country
Pooled Account
A type of managed product structure
whereby by investors’ funds are gathered
into a legal structure, usually a trust or
corporation. An investor’s claim to the
pool’s returns is proportional to the number
of shares or units the investor owns. The
pools are often open-ended, which means
units are issued when there are net cash
inflows to the fund, or units are redeemed
when there are net cash outflows.
Portfolio
Holdings of securities by an individual or
institution. A portfolio may contain debt
securities, preferred and common stocks of
various types of enterprises and other types
of securities.
Potential Output
The maximum amount of output the economy is capable of producing during a given period when all of its available resources are employed to their most efficient use.
Preferred Dividend Coverage Ratio
A type of profitability ratio that measures
the amount of money a firm has available
to pay dividends to their preferred
shareholders.
Preferred Shares
A class of share capital that entitles the owners to a fixed dividend ahead of the company’s common shares and to a stated dollar value per share in the event of liquidation. Usually do not have voting rights unless a stated number of dividends have been omitted. Also referred to as preference shares.
Preliminary Prospectus
The initial document released by an
underwriter of a new securities issue to
prospective investors.
Premium
The amount by which a preferred stock or
debt security may sell above its par value.
In the case of a new issue of bonds or
stocks, the amount the market price rises
over the original selling price. Also refers to
that part of the redemption price of a bond
or preferred share in excess of face value,
par value or market price. In the case of
options, the price paid by the buyer of an
option contract to the seller.
Prepaid Expenses
Payments made by the company for services to be received in the near future. For example, rents, insurance premiums and taxes are sometimes paid in advance. A statement of financial position item.
Prepayment Risk
The risk that the issuer of a bond might
prepay or redeem early some or all principal
outstanding on the loan or mortgage.
