|Paper or Commercial Paper:
Short-term obligations issued for terms of 2 to
270 days. Such investments are targeted to
investors with large amounts of cash available on
a short-term basis.
|Par Value: The value of a
security printed on the certificate.
|Parking: Investing funds
temporarily in short-term, safe havens while
longer-term investment options are considered.
|Partial Breach: A minor
breach of contract that does not affect an
agreement to a major extent. As a result, the
contract is maintained. An example of a partial
breach would be if a business is a day late in
delivering some materials necessary for a
contract. If a one day delay has no material
affect on the ability of the other business to
hold up its part of the bargain, then it is only a
|Partnership: A business,
not-incorporated, where more than one person is a
part-owner. A limited partnership will have
partners who contribute money, but have no
liability because they do not help run the
business or make business decisions. A company
where all partners share full responsibilities and
profits are called a general partnership.
|Patent: A legal claim to a
new process or device that provides protection
from theft by other companies or individuals for
17 years. Patents must be registered in order to
|Penny Stock: A stock
selling at less than one dollar, available through
over- the-counter markets and considered a high
risk investment. Some call any stock under $5 a
|Pension Fund: An investment
fund established by a corporation or organization
to manage retirement benefits and investments for
|Percent: Based on the whole
amount, divided into 100 parts. Each of the 100
parts is one percent.
|Pink Sheet: Daily
publication for The National Quotation Bureau for
unlisted stocks, showing bid and ask prices by
various market makers.
|Piercing the Corporate Veil:
The process of suing individuals involved in the
management of a corporation. Since corporations
generally shield individuals from liability, such
action can only be taken if it can be proven that
there is a good reason to disregard the corporate
A piece of marketing literature that is placed in
a store where a customer is likely to be making a
purchase decision about a product.
|Points: One point = 1% of
the loan amount or price
|Poison Pill: A resolution
passed by a company's board of directors that
makes it difficult or impossible to stage an
|Ponzi Scheme: An illegal
pyramid marketing program in which the proceeds
from new investors are used to payoff existing
investors. The last wave of investors is left with
|Portfolio: The investments
owned by an investor or a mutual fund.
|Position: The amount of
money an individual has invested in a particular
security; a company's stake. If you own 100
shares, then 100 shares is your position.
|Positioning: The way a
company wants to be perceived by its public. The
position is supported by investments in
advertising, direct marketing, and public
|Power of Acceptance: An
individual's right and ability to accept or reject
the terms of a contract.
|Power of Attorney:
Appointing an individual to make important
decisions for another individual.
|Premium: 1 - The extra
amount an investor pays for a bond or preferred
share of stock due to current interest rates. 2 -
The price paid for an option. 3 - The payment on
an insurance policy.
|Preferred Stock: Stock
issued with a guaranteed dividend. This non-voting
stock, and shareholders can not force the company
to pay the dividend of the company falls on to
|Pre-paid Expense: Paying
for an expense in advance, usually for tax or
|Price-Earnings Ratio (P/E
ratio): Current share price divided by a
stock's earnings per share. Stocks in similar
industries often have similar P/E ratios. Any
differences reflect investor anticipation of the
company's prospects. Also called the multiple.
|Prime Rate: The lowest
interest rate that banks charge their best
business customers for short-term unsecured loans.
Also called the Federal Reserve Bank Rate, it is
usually about 3% over the Federal Funds Rate.
|Principal: 1. The amount of
money invested or deposited in an account. Also
the amount of money borrowed. 2. An owner or
partner of a business.
|Private Placement: Offering
securities directly to private investors, rather
than through a public offering.
Discussions that take place between an attorney
and his/her client that may not be forcibly
divulged in court proceedings.
|Product Life Cycle: The
stages through which a product progresses in the
marketplace. This normally includes introduction,
acceptance, growth, and maturity.
|Profit Margin: The
percentage of the selling price that is profit
|Profit Sharing Plan: A plan
that provides for the division of a portion of the
company's profits, part of which are generally
deposited into a tax-deferred account. The funds
are paid out when the employee retires or leaves
|Profit Taking: Lucky
investors cash in their profits.
|Progressive Tax: A type of
tax that takes a larger proportion of income from
those with higher Incomes.
Tactics that communicate product and company
information to the public through such vehicles as
newsletters, advertisements, sweepstakes, and
|Proprietorship: A type of
business that is con- trolled and managed by one
|Prospecting: The marketing
practice of seeking out and classifying potential
clients in terms of their likelihood to buy.
|Proxy: The right a
shareholder gives another to represent their vote
at a shareholder’s meeting.
|Public Company: A company
that you can buy a piece of by purchasing shares
of their stock. This is what you do when you
invest in the stock market.
Activities on behalf of a company or organization
that increase the company's exposure in the
community through media coverage, sponsorships,
and community involvement.
|Put: An option to sell a
specific stock for a specified price within a set
|Pyramid: An illegal
investment practice that involves soliciting
investors by promising them high returns, but then
using their invested funds to pay earlier
investors, rather than actually investing those
funds in securities.
|Prospectus: A document that
describes an investment and fully discloses its
risks, policies, and fees.
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