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P


Par value

The principal amount of a bond or note due at maturity.


Paying agent

Place where principal and interest are payable. Usually a designated bank or the office of the treasurer of the issuer.


Poison Pill

Strategic move by a takeover-target company to make its stock less attractive to an acquirer.


Premium
The amount by which the price of a security exceeds its principal amount.


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


Prepayment risk
The risk that falling interest rates will lead to heavy prepayments of mortgage or other loans-forcing the investor to reinvest at lower prevailing rates.


Present Value
Value today of a future payment, or stream of payments, discounted at some appropriate compound interest rate.


Primary market

The market for new issues.


Principal

The face amount of a bond, payable at maturity.


Private Placement

Of stocks, bonds, or other investments directly to an institutional investor.


Privatization
Process of converting a publicly operated enterprise into a privately owned and operated entity.


Profit Taking
Action by short-term securities or commodities traders to cash in on gains earned on a sharp market. rise.


Prospectus

Formal written offer to sell securities that sets forth the plan for a proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision.


Put Option

Contract that grants the right to sell at a specified price a specific number of shares by a certain date.


Q



Quick Ratio

Cash, marketable securities, and accounts receivable divided by current liabilities.