Finance terms starting with P

173 terms

Prepayment The payment of a debt before it actually becomes due.
Prepayment Clause A clause in a mortgage allowing the mortgagor to pay off part or all of the unpaid debt before it becomes due.
Prepayment Penalty A penalty imposed on a borrower for repaying the loan before its due date. (In the case of a mortgage, this applies when there is not a prepayment clause…
Prepayment Penalty (Mortgages) A charge assessed by a creditor when the consumer pays off all or part of the loan before it is due.
Prepayment penalty/prepayment premium A charge the mortgagor pays the mortgagee for the privilege to prepay the loan.
Prequalification When you prequalify for a mortgage, the lender calculates the approximate amount you'd be able to borrow, based on your current income and debt.
Prerefunding Prerefunding may occur when a corporation plans to redeem a callable bond before its maturity date.
Present value The current value of a future cash flow or series of cash flows discounted at an appropriate interest rate or rates.
Present value (PV) The current value of a future cash flow or series of cash flows discounted at an appropriate interest rate or rates.
Pretax contribution A pretax contribution is money that you agree to have subtracted from your salary and put into a retirement savings plan or other employer sponsored…
Pretax income Pretax income, sometimes described as pretax dollars, is your gross income before income taxes are withheld.
Previous Balance The cardholder's account balance as of the previous billing statement.
Price improvement Price improvement occurs when you pay less or receive more on a securities transaction than the bid and offer prices being currently quoted.
Price-to-book ratio Some financial analysts use price-to-book ratios to identify stocks they consider to be overvalued or undervalued.
Price-to-cash flow You find a company's price-to-cash flow ratio by dividing the market price of its stock by its cash receipts minus its cash payments over a given period…
Price-to-earnings ratio (P/E) The price-to-earnings ratio (P/E) is the relationship between a company's earnings and its share price, and is calculated by dividing the current price…
Price-to-sales ratio A price-to-sales ratio, or a stock's market price per share divided by the revenue generated by sales of the company's products and services per share…
price/earnings ratio A common stock's current market price divided by the company's annual per share earnings.
Pricipal, interest, taxes, insurance and homeowners association dues (PITIA) Shorthand for principal, interest, taxes and insurance, which are the components of the housing expense.
Primary market If you buy stocks or bonds when they are initially offered for sale, and the money you spend goes to the issuer, you are buying in the primary market.
Primary Mortgage Market The market for newly originated mortgages.
Primary or Principal Residence the property in which the homeowner will live most of the time, as distinct from a second home or an investor property that will be rented.
Prime See Subprime
Prime Mortgages A classification of mortgages that are considered to be of high quality.
Prime Rate The prime rate is a benchmark for interest rates on business and consumer loans.
Principal Face value of an obligation, such as a bond or a loan, that must be repaid at maturity.
Principal Balance The outstanding balance on a loan, excluding interest and fees.
Principal, Interest, Taxes, and Insurance (PITI) Common acronym for principal, interest, taxes, and insurance—used when describing the monthly charges on a mortgage.
Private equity Private equity is an umbrella term for large amounts of money raised directly from accredited individuals and institutions and pooled in a fund that…
Private letter ruling A private letter ruling explains a position the Internal Revenue Service (IRS) has taken on a specific issue or action that affects the amount of income…
Private Mortgage Insurance (PMI) Insurance offered by a private insurance company that protects the bank against loss on a defaulted mortgage up to the limit of the policy (usually 20 to…
Private placement If securities are sold directly to an institutional investor, such as a corporation or bank, the transaction is called a private placement.
Private-Label Mortgage-Backed Securities (Private-label MBS) MBS derived from mortgage loan pools assembled by entities other than GSEs or federal government agencies, such as private-sector finance companies.
Private-Label Mortgages loans that are not owned or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae, or another Federal agency.
Privatization Privatization is the conversion of a government-run enterprise to one that is privately owned and operated.
Pro rata cancellation Revocation of a policy by an insurance company that returns to the policyholder the unearned premium.
Probate Probate is the process of authenticating, or verifying, your will so that your executor can carry out the wishes you expressed in the document for…
Probate estate Your probate estate includes all of the assets that will pass to your heirs through your will.
Probation Surcharge (Premium) A flat charge that the policyholder must pay on each new or renewal policy issued covering property in a community that the NFIP has placed on probation…
processor a person who acts as a liason between your Loan Officer and the Underwriter to help facilitate the flow of paperwork which takes you from loan application…
Producer An authorized representative of an insurance company who sells and services insurance contracts.
Producer (agent) A licensed individual or organization authorized to sell, solicit, negotiate and service insurance policies for an insurance company.
Profit Profit, which is also called net income or earnings, is the money a business has left after it pays its operating expenses, taxes, and other current bills.
Profit margin A company's profit margin is derived by dividing its net earnings, after taxes, by its gross earnings minus certain expenses.
Profit sharing A profit-sharing plan is a type of defined contribution retirement plan that employers may establish for their workers.
Profit taking Profit taking is the sale of securities after a rapid price increase to cash in on gains.
Program trading Program trading is the purchase or sale of a basket, or group, of 15 or more stocks with the combined value of $1 million or more.
Progressive tax In a progressive, or graduated, income tax system, taxpayers with higher incomes are taxed at higher rates that those with lower incomes.
Prohibited Source In the Standards of Conduct, a prohibited source for gifts is any person (including an individual or entity) who: Is seeking official action by the…
Proof of loss Documents that you give the insurer to support your request for payment of losses.
Property damage Physical damage to property.
Property damage (PD) Physical damage to property.
Property Damage Liability Pays for damage to another person’s car or property such as fences, buildings, utility poles, signs, and trees.
property taxes Taxes on property, especially real estate, but also can be on boats, automobiles (often paid along with license fees), recreational vehicles, and business…
Property Type Indicates whether the loan or application was for a one-to-four-family dwelling (other than manufactured housing), manufactured housing, or multifamily…
proportional tax A tax that takes the same percentage of income from all income groups.
Proprietary fund Proprietary mutual funds are offered for sale by the financial institution - such as a bank, investment company, or brokerage firm - that sponsors the…
Prospectus A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commissions…
Protected balances Protected balances are amounts owing on the account that under law are not subject to an increase in interest rates or fees.
protective tariff A tax levied on imported goods with the purpose of reducing domestic consumption of foreign-produced goods.
Proxy If you own common stock in a US corporation, you have the right to vote on certain company policies and elect the board of directors by casting a proxy…
Proxy statement The Securities and Exchange Commission (SEC) requires that all publicly traded companies provide a proxy statement to its shareholders prior to the annual…
Prudent man rule The prudent man rule is the basic standard a fiduciary, who is responsible for other people's money, must meet.
Prudent Person Rule The standard adopted by some states to guide those fiduciaries with responsibility for investing money of others.
Public Adjuster A person you can hire to help settle a claim with an insurance company. A public adjuster may be hired to handle a complex or difficult loss negotiation.
Public company The stock of a public company is owned and traded by individual and institutional investors.
public goods and services Benefits that cannot be withheld from those who don't pay for them, and benefits that may be "consumed" by one person without reducing the amount of the…
Public insurance adjuster An individual employed by a policyholder to negotiate a claim with the insurance company in exchange for a percentage of the claim settlement.
Pump and dump In a pump and dump scheme, a scam artist manipulates the stock market by buying shares of a low-cost stock and then artificially inflating the price by…
Purchase APR The APR you will pay for purchases if you carry a balance on your credit card. For many cards, you only have to pay interest on purchases if you carry…
Purchases A purchase is the use of your card to buy or lease products or services. The purchase of cash or cash equivalents, like casino chips or lottery tickets…
Put option Buying a put option gives you the right to sell the specific financial instrument underlying the option at a specific price, called the exercise or strike…
Put-call ratio Since investors buy put options when they expect the market to fall, and call options when they expect the market to rise, the relationship of puts to…