Personal Finance — page 14 of 19

Personal Finance terms

1301. Previous Balance The cardholder's account balance as of the previous billing statement.
1302. 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.
1303. Price-to-book ratio Some financial analysts use price-to-book ratios to identify stocks they consider to be overvalued or undervalued.
1304. 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…
1305. 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…
1306. 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…
1307. Pricipal, interest, taxes, insurance and homeowners association dues (PITIA) (PITIA) Shorthand for principal, interest, taxes and insurance, which are the components of the housing expense.
1308. 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.
1309. Primary Mortgage Market The market for newly originated mortgages.
1310. 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.
1311. Prime See Subprime
1312. Prime Mortgages A classification of mortgages that are considered to be of high quality.
1313. Prime Rate The prime rate is a benchmark for interest rates on business and consumer loans.
1314. Principal Face value of an obligation, such as a bond or a loan, that must be repaid at maturity.
1315. Principal Balance The outstanding balance on a loan, excluding interest and fees.
1316. Principal, Interest, Taxes, and Insurance (PITI) (PITI) Common acronym for principal, interest, taxes, and insurance—used when describing the monthly charges on a mortgage.
1317. 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…
1318. 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…
1319. Private Mortgage Insurance (PMI) (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…
1320. Private placement If securities are sold directly to an institutional investor, such as a corporation or bank, the transaction is called a private placement.
1321. 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.
1322. Private-Label Mortgages loans that are not owned or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae, or another Federal agency.
1323. Privatization Privatization is the conversion of a government-run enterprise to one that is privately owned and operated.
1324. 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…
1325. Probate estate Your probate estate includes all of the assets that will pass to your heirs through your will.
1326. 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…
1327. 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.
1328. Profit margin A company's profit margin is derived by dividing its net earnings, after taxes, by its gross earnings minus certain expenses.
1329. Profit sharing A profit-sharing plan is a type of defined contribution retirement plan that employers may establish for their workers.
1330. Profit taking Profit taking is the sale of securities after a rapid price increase to cash in on gains.
1331. 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.
1332. Progressive tax In a progressive, or graduated, income tax system, taxpayers with higher incomes are taxed at higher rates that those with lower incomes.
1333. 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…
1334. 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…
1335. Property Type Indicates whether the loan or application was for a one-to-four-family dwelling (other than manufactured housing), manufactured housing, or multifamily…
1336. proportional tax A tax that takes the same percentage of income from all income groups.
1337. 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…
1338. Prospectus A legal document describing securities being offered for sale to the public. It must be prepared in accordance with provincial securities commissions…
1339. Protected balances Protected balances are amounts owing on the account that under law are not subject to an increase in interest rates or fees.
1340. protective tariff A tax levied on imported goods with the purpose of reducing domestic consumption of foreign-produced goods.
1341. 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…
1342. 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…
1343. Prudent man rule The prudent man rule is the basic standard a fiduciary, who is responsible for other people's money, must meet.
1344. Public company The stock of a public company is owned and traded by individual and institutional investors.
1345. 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…
1346. 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…
1347. 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…
1348. 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…
1349. 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…
1350. 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…
1351. Quadruple witching day Once every quarter - on the third Friday of March, June, September, and December - stock options, stock index options, stock index futures contracts, and…
1352. Qualified Domestic Relations Order (QDRO) A court order that recognizes or creates a spouse’s or a former spouse’s right to a portion of a member’s retirement annuity.
1353. Qualified domestic trust (QDOT) If your spouse isn't a US citizen and your estate is large enough to risk being vulnerable to estate taxes, you can use a qualified domestic trust (QDOT)…
1354. Qualified Plan The South Carolina Retirement Systems’ retirement plans are qualified plans under section 401(a) of the Internal Revenue Code.
1355. Qualified retirement plan A qualified retirement plan is an employer sponsored plan that meets the requirements established by the Internal Revenue Service (IRS) and the US…
1356. Qualified Trusts Blind or diversified trusts authorized by the Ethics in Government Act as a means of avoiding conflicts of interest for employees with extensive financial…
1357. qualifying child To be a qualifying child, the dependent must meet eight tests: (1) relationship, (2) age, (3) residence, (4) support, (5) citizenship or residency, (6)…
1358. qualifying relative There are tests that must be met to be a qualifying relative, they are: (1) not a qualifying child, (2) member of household or relationship, (3)…
1359. Qualifying Widow(er) filing status If your spouse died in 2010, you can use married filing jointly as your filing status for 2010 if you otherwise qualify to use that status.
1360. Qualitative analysis When a securities analyst evaluates intangible factors, such as the integrity and experience of a company's management, the positioning of its products…
1361. Quality Edits The data in question do not agree with an expected standard (value). Review for correctness and change only if erroneous data has been reported.
1362. Quantitative analysis When a securities analyst focuses on a corporation's financial data in order to project potential future performance, the process is called quantitative…
1363. Quarter The financial world splits up its calendar into four quarters, each three months long.
1364. Quasi-public corporation In the United States, quasi-public corporations have links to the federal government although they are technically in the private sector.
1365. Qubes The NASDAQ Stock Market sells shares in a unit investment trust (UIT) that tracks the NASDAQ 100 Stock Index.
1366. Quotation (Quote) On a stock market, a quotation combines the highest bid to buy and the lowest offer to sell a stock.
1367. R-squared R-squared is a statistical measurement that determines the proportion of a security's return, or the return on a specific portfolio of securities, that…
1368. Rally A rally is a significant short-term recovery in the price of a stock or commodity, or of a market in general, after a period of decline or sluggishness.
1369. Random walk theory The random walk theory holds that it is futile to try to predict changes in stock prices.
1370. Ranking Ranking is a method of assigning a value to an investment in relation to comparable investments by using a scale.
1371. Rate Lock The period of time that a mortgage company will guarantee a loan's interest rate, usually 30 or 60 days.
1372. Rate of return Rate of return is income you collect on an investment expressed as a percentage of the investment's purchase price.
1373. Rate Spread The price data take the form of a "rate spread." Lenders must report the spread (difference) between the annual percentage rate (APR) on a loan and the…
1374. Rating Rating means evaluating a company, security, or investment product to determine how well it meets a specific set of objective criteria.
1375. Rating service A rating service, such as A.M. Best, Moody's Investors Service, or Standard & Poor's, evaluates bond issuers to determine the level of risk they pose to…
1376. Real Estate Typically includes residential property (e.g., homes, apartment buildings, hotels), commercial property (e.g.
1377. Real Estate Investment Trust (REIT) Managed diversified portfolios of real estate and mortgages. REITs are usually publicly traded like mutual funds and qualify as excepted investment funds…
1378. Real Estate Settlement Procedures Act (RESPA) (RESPA) Federal law that, among other things, requires lenders to provide "good faith" estimates of settlement costs and make other disclosures regarding the…
1379. Real interest rate Your real interest rate is the interest rate you earn on an investment minus the rate of inflation. For example, if you're earning 6.
1380. Real property A dwelling or home is often referred to as real property.
1381. Real property tax A real property tax is a local tax on the value of real estate. The property may be assessed at full value, which is presumably the price that the owner…
1382. Real rate of return You find the real rate of return on an investment by subtracting the rate of inflation from the nominal, or named, rate of return.
1383. Real Time When an event is reported as it happens - such as a quick jump in a stock's price or the constantly changing numbers on a market index - you are getting…
1384. Realized gain When you sell an investment for more than you paid, you have a realized gain. For example, if you buy a stock for $20 a share and sell it for $35 a share…
1385. Reasons for Denial These fields identify why an application was denied. As many as three reasons may be reported.
1386. Recapture When you recapture assets, you regain them, usually because of the provisions of a contract or legal precedent.
1387. Recession In general usage, the word recession connotes a marked slippage in economic activity.
1388. Recharacterization When you have converted one type of individual retirement account (IRA) to another type - such as a traditional IRA to a Roth IRA - and then convert it…
1389. Reconciliation The process of analyzing two related records and, if differences exist between them, finding the cause and bringing the two records into agreement.
1390. Record date To be paid a stock dividend, you must own the stock on the day that the corporation's board of directors names as the record date, also known as the date…
1391. Recording Fees Charged by the Registry of Deeds for the filing of documents or details of a legal document to make them a matter of public record.
1392. Recusal Is an ethics agreement in which an employee disqualifies himself from acting in official matters involving entities that present a financial conflict of…
1393. Red herring When a security is offered to the public for the first time, the underwriter prepares a preliminary prospectus, called a red herring.
1394. Redemption A redemption is the right given to a security holder to sell, at anytime, some or all of his/her units back to the fund for cash.
1395. Redemption fee Some open-end mutual funds impose a redemption fee when you sell shares in the fund, often during a specific, and sometimes brief, period of time after…
1396. Redlining The alleged practice of certain lending institutions of not making mortgage, home improvement, and small business loans in certain neighborhoods-usually…
1397. Refinance The repayment of a debt from the proceeds of a new loan using the same property as security.
1398. Refinancing A way of obtaining a better interest rate, lower monthly payments, or borrow cash on the equity in a property that has built up on a loan.
1399. Refund An amount paid back because of an overpayment or because of the return of an item previously sold.
1400. refundable credit When the amount of a credit is greater than the tax owed, taxpayers can receive a "refund" for some of the unused credit.