sohomghosh/FinRAD_Financial_Readability_Assessment_Dataset

terms stringlengths 1 156	definitions stringlengths 3 4.2k	source stringclasses 15 values	flesch_reading_ease float64 -301.79 121	flesch_kincaid_grade float64 -3.5 55.6	smog_index float64 0 26.5	coleman_liau_index float64 -33.81 51.4	automated_readability_index float64 -6.9 65	dale_chall_readability_score float64 0.1 35.3	linsear_write_formula float64 -0.5 73	gunning_fog float64 0.4 56
OSCILLATOR	In TECHNICAL ANALYSIS, a measure of market movements used to identify OVERBOUGHT or OVERSOLD conditions; different oscillators exist, including the relative strength of the market (average number of days ending up divided by number of days ending down).	palgrave	15.99	20.5	0	15.39	24.3	11.75	29	24.67
OSE	See OSAKA STOCK EXCHANGE.	palgrave	50.5	7.2	0	7.25	6.5	7.78	2	11.6
OTC	See OVER-THE-COUNTER.	palgrave	35.61	8.8	0	18.7	26.7	0.1	1	0.8
OUT-OF-THE-MONEY	A condition where the price of an UNDERLYING ref- erence ASSET is lower than the STRIKE PRICE for a CALL OPTION, or higher than the strike for a PUT OPTION, meaning the CONTRACT has no immediate INTRINSIC VALUE if EXERCISED or sold. See also AT-THE-MONEY, IN-THE-MONEY, MONEYNESS.	palgrave	47.62	12.5	0	10.51	13.8	9.84	14.75	14.51
OUTPERFORMANCE OPTION	An OVER-THE-COUNTER COMPLEX OPTION that grants the buyer a PAYOFF based on the degree to which a mar- ket reference or SPREAD outperforms a predefined STRIKE PRICE. See alsoSPREAD OPTION, UNDERPERFORMANCE OPTION.	palgrave	55.24	9.5	0	14.15	13.2	11.83	10.5	11.4
OUTSIDE DIRECTOR	In the United States, a board DIRECTOR that is not related to the company or its EXECUTIVE MANAGEMENT in any fashion, i.e., the director has no former employment ties, or any existing business, consult- ing, or personal relationships with executives. Outside directors are typically considered to be independent for GOVERNANCE purposes. See also INSIDE DIRECTOR.	palgrave	27.52	14	17.1	13.92	14.1	10.29	15.166667	18.23
OUTSIDER SYSTEM	A corporate ownership system where no significant con- trolling interests exist and SHAREHOLDER influence over the GOVERNANCE and management processes is theoretically strong. The outsider system is found in the United States, the United Kingdom, Canada, and Australia. See also INSIDER SYSTEM.	palgrave	31.89	12.3	14.1	16.12	13.9	11.1	10.666667	16.08
OUTSTANDING SHARES	The total amount of SHARES issued by a com- pany and which are currently held by INVESTORS, including shares held by employees and executives but excluding shares that have been repurchased from the market under a TREASURY STOCK program. Also known as ISSUED AND OUTSTANDING, SHARES OUTSTANDING.CREDIT DERIVATIVE, CURRENCY DERIVATIVE, EQUITY DERIVATIVE, INTEREST RATE DERIVATIVE, WEATHER DERIVATIVE.	palgrave	17.17	17.9	0	16.89	21.2	10.59	22.25	19.12
OVER THE WALL	A process where bankers inform a research analyst within the BANK about an impending CORPORATE FINANCE or NEW ISSUE transaction for a company; once “over the CHINESE WALL,” the analyst can- not produce research information as it is apt to be influenced by, or contain details of, NONPUBLIC INFORMATION.	palgrave	13.28	23.6	0	12.96	27.5	12.19	34.5	25.31
OVERBOUGHT	A situation where a SECURITY or market has been the focus of aggressive buying over a short period of time, and which may be due for a correction due to a relative lack of new buyers. See also OVERSOLD.	palgrave	60.14	9.7	0	6.67	8.1	9.06	12.75	13.95
OVERCOLLATERALIZATION TEST	A COLLATERAL-related financial test performed in a COLLATERALIZED DEBT OBLIGATION or SECURITIZATION structure to determine whether the CASH FLOW WATERFALL can make pay- ments to increasingly SUBORDINATED TRANCHES. The form of the test is given by:(PRINCIPAL value of the collateral pool)/(Principal of a target TRANCHE + Principal of all tranches ranking SENIOR to the target)The test is considered successful if the interest coverage ratio is greater than or equal to the specified TRIGGER.	palgrave	9.56	20.9	0	16.2	24	11.78	27.75	23.29
OVERHEAD	The administrative costs associated with operating a business, such as costs for salaries, rents, insurance, utilities, and supplies.	palgrave	27.83	13.9	0	17.86	17.9	12.42	14	18.31
OVERHEATING	A stage in the expansion of an ECONOMY or the appreci- ation in a market or ASSET where speculative factors force growth/prices to move up rapidly, at what may ultimately be an unsustainable pace.	palgrave	36.97	16.6	0	10.46	18.1	10.9	23	20.66
OVERHEDGING	Excessive HEDGE protection that might not be required when broader PORTFOLIO exposures with “beneficial” CORRELATIONS that produce natural offsets are considered.	palgrave	16.32	16.2	0	21.64	20.9	14.45	18.5	23.64
OVERINSURANCE	Any instance where an INSURED carries too much INSURANCE coverage against a specific PERIL. Since an insured can never profit from a CLAIM (being entitled only to fair restitution related to the amount lost), overinsurance results in wasted PREMIUM payments. See alsoUNDERINSURANCE	palgrave	41.7	12.7	0	15.2	16	11.45	15	16.97
OVERISSUE	Issuance of COMMON STOCK by a company in excess of its authorized SHARE limit. The corporate registrar is typically responsible for ensuring that overissue does not occur.	palgrave	40.85	10.9	0	12.87	10.6	11.32	10.25	14.29
OVERLAPPING INSURANCE	A situation where an INSURED has two or more INSURANCE policies covering the same RISK. If a CLAIM is made, the insured will not be able to receive payment under all policies, since insurance cannot result in a net profit; the amount of the claim is generally divided on PRO-RATA basis between the policies. See also APPORTIONMENT, DIVIDED COVER, PRIMACY.	palgrave	51.18	11.1	13.6	10.44	11.8	8.84	13.333333	12.67
OVERLINED	A temporary situation where a COMMERCIAL PAPER ISSUER has repaid all outstanding NOTES and has excess SWINGLINE availability.	palgrave	27.83	13.9	0	16.88	15.8	13.3	14	18.31
OVERNIGHT MONEY	Funds borrowed on an overnight basis by a BANK or other financial institution. Such overnight funding is payable within one day, and can be accessed through direct interbank borrowings (unsecured) or OVERNIGHT REPURCHASE AGREEMENTS (secured).	palgrave	53.71	10.1	0	15.72	15.3	11.27	11.75	13.86
OVERNIGHT RATE	Any INTEREST RATE reference that is computed on, and reflective of, an overnight period, e.g., EONIA, SONIA.REVERSE REPURCHASE AGREEMENT. See also OPEN REPURCHASE AGREEMENT, TERM REPURCHASE AGREEMENT.	palgrave	32.39	12.1	0	17.16	15.7	11.32	11.25	14.29
OVERSOLD	A situation where a SECURITY or market has been the focus of aggressive selling over a short period of time, and which may be due for a price rebound due to a lack of additional sellers. See also OVERBOUGHT.	palgrave	60.14	9.7	0	7.43	8.7	9.06	12.25	12.93
OVERSUBSCRIPTION	A situation where the number of ORDERS for a NEW ISSUE of SECURITIES is greater than the available SUPPLY, suggesting the price of the security will rise sharply at launch. If an EQUITY issue is oversubscribed, the UNDERWRITERS may exercise the GREENSHOE and float more shares; if a DEBT issue is oversubscribed, the issuer may authorize the underwriters to increase the size of the deal. See also UNDERSUBSCRIPTION.	palgrave	48.43	12.1	14.6	12.19	14.1	9.87	15.333333	14.96
OVERTRADING	See CHURNING.	palgrave	77.91	2.9	0	1.3	7.8	11.63	0	0.8
P/E RATIO	See PRICE/EARNINGS RATIO.	palgrave	59.97	5.6	0	15.03	16.2	14.31	0.5	1.2
PAASCHE’S INDEX	See CURRENT WEIGHTED INDEX.	palgrave	50.5	7.2	0	10.15	8.8	15.68	1	1.6
PAC BOND	See PLANNED AMORTIZATION CLASS BOND.	palgrave	66.4	5.2	0	14.24	11.2	13.36	2.5	10
PAC MAN DEFENSE	An ANTITAKEOVER DEFENSE where a TARGET company initiates a counterbid for the company that is attempting a HOSTILE TAKEOVER of its operations. The counterbid may involve the use of a consider- able amount of LEVERAGE, making the defense strategy financially risky.	palgrave	33.75	13.6	0	13.87	14.5	10.05	15.75	16
PACKAGE INSURANCE	See MULTILINE POLICY.	palgrave	9.21	12.7	0	9.23	9.9	14.31	2.5	27.87
PAID-IN CAPITAL	CAPITAL received by a company from the flotation of COMMON STOCK through an INITIAL PUBLIC OFFERING, RIGHTS ISSUE, or ADD-ON. Also known as PAID-IN SURPLUS. See also RETAINED EARNINGS, CAPITAL SURPLUS.	palgrave	52.56	8.5	9.7	11.75	9.7	9.24	5.5	5.41
PAID-IN SURPLUS	(1) A measure of an INSURER’s SOLVENCY, computed as the excess of an insurer’s admitted ASSETS over the total value of its LIABILITIES and minimum required CAPITAL. (2) See PAID-IN CAPITAL.	palgrave	23.09	17.7	0	11.56	18.2	11.29	24.5	20.14
PAID-UP POLICY	In the United Kingdom, an ENDOWMENT ASSURANCEpolicy where the INSURED ceases to make PREMIUM payments, and where P the SURRENDER VALUE is then used to purchase some amount of cheaper life assurance coverage.	palgrave	29.52	17.3	0	13.53	20	11.02	22.5	20.47
PAINTING THE TAPE	See DAISY CHAIN.	palgrave	119.19	-2.7	0	-0.46	2.1	0.15	0.5	1.2
PAIRED SHARES	The COMMON STOCK of two companies, managed by the same EXECUTIVE MANAGEMENT team, that are traded together through a single certificate. Also known as STAPLED STOCK.	palgrave	49.82	9.5	0	12.17	10.4	9.14	8	11.35
PAIRS TRADING	An INVESTMENT strategy that involves going LONG of one STOCK (perceived to be CHEAP) and SHORT of a second stock (RICH) in expectation of capturing the SPREAD movements between the two over some time horizon, typically based on some impending event (e.g., earnings announcements). Since the investor hopes to capture the spread, the strategy is MARKET NEUTRAL, meaning the absolute level of the market is not relevant to success. Pairs trading is often done within a specific industry sector, e.g., one automobile stock versus a second one, but is also characteristic of takeover and acquisition stocks in RISK ARBITRAGE.	palgrave	37.98	16.2	16.3	12.78	19.9	11.17	21.833333	18.86
PAPER LOSS	See UNREALIZED LOSS.	palgrave	34.59	9.2	0	7.32	8.3	9.05	1.5	14.53
PAPER MARKET	See PAPER SWAP.	palgrave	93.81	0.9	0	-2.38	0.5	9.05	0.5	1.2
PAPER PROFIT	See UNREALIZED PROFIT.	palgrave	9.21	12.7	0	11.15	11.5	14.31	1.5	14.53
PAPER SWAP	(1) An OVER-THE-COUNTER SWAP based on a physical COMMODITY (often an energy product) that is transacted strictly on paper, with no attempt or intent to make or take delivery of the underlying phys- ical goods; paper swaps are always settled on a cash, or financial, basis, or are OFFSET prior to EXPIRY. (2) A COMMODITY DERIVATIVE involving the exchange of fixed and floating prices related to paper products, such as pulp, paperboard, and newsprint. The paper swap can serve as a HEDGE for firms exposed to the selling or buying price of paper products. (1) Also known asPAPER MARKET.	palgrave	21.23	22.6	0	10.81	26.5	12.31	31.75	24.65
PAR	See VALUE.	palgrave	35.61	8.8	0	-7.41	0.8	0.1	0	0.8
PAR BOND	(1) A BOND that trades at its PAR VALUE. (2) A form of BRADY BOND with no price discount but with a smaller INTEREST COUPON than the DISCOUNT BOND alternative. (1) See also PREMIUM BOND.	palgrave	61.33	13.4	0	7.03	16.5	10.79	20.5	17.43
PAR VALUE	The stated value, or FACE VALUE, of a SECURITY established at the time of issuance, and generally also its REDEMPTION VALUE. For BONDS and NOTES it is the amount to be repaid to INVESTORS at MATURITY, for COMMON STOCK or PREFERRED STOCK it is simply an artificial value that has no bearing after the initial launch of SHARES. Also known as NOMINAL VALUE, PAR.TERM STRUCTURE, ZERO COUPON YIELD CURVE.BACK LOAN.	palgrave	56.29	11.2	11.9	10.28	13.1	10.43	14	13.32
PARALLEL MONEY MARKETS	A sector of the financing market that occurs between users and suppliers of short-term funds without the use of specialized INTERMEDIARIES, such as DISCOUNT HOUSES. The development of parallel money markets is a form of DISINTERMEDIATION.	palgrave	27.83	13.9	0	14.5	14.1	10.67	12.5	14.98
PARAMETRIC TRIGGER	A conditional event in an INSURANCE-LINKED SECURITY that results in suspension of INTEREST and/or PRINCIPAL when a specific damage metric reaches a certain value. The metric is generally based on location and severity parameters. See also INDEMNITY TRIGGER, INDEX TRIGGER.	palgrave	24.14	13.2	14.6	14.78	12.7	12.19	10.666667	17.32
PARASOL POLICY	See DIFFERENCE IN CONDITIONS INSURANCE.	palgrave	15.64	12.3	0	17.72	14	10.2	4.5	18
PARENT	The primary operating entity in a CORPORATION, and often the one with the most significant operations and financial resources. A par- ent company may be called on by potential CREDITORS to GUARANTEE the LIABILITIES of any SUBSIDIARIES. See also HOLDING COMPANY.	palgrave	32.19	12.2	15	12.69	10.8	10.86	11.166667	16.21
PARENT ORDER	An overarching ORDER to execute a particular transaction that can be divided up into smaller CHILD ORDERS. A parent order is com- monly used as a fundamental starting point in ALGORITHMIC TRADING. See also ORDER GENERATION LOGIC, ORDER PLACEMENT LOGIC.	palgrave	32.6	12	12.5	11.99	10.3	10.61	8.333333	13.32
PARI PASSU	Literally “on equal standing.” In FINANCE it applies to granting a party the same rights/seniority that have been granted to others. A pari passu clause is often included in VENTURE CAPITAL, BOND, and LOAN agreements to ensure that seniority classes remain unaffected by future financial transactions. See also NEGATIVE PLEDGE, STRUCTURAL SUBORDINATION.	palgrave	37	12.4	13.6	15.19	14.6	12.39	12	13.07
PARIS CLUB MEETING	A meeting between a sovereign DEBTOR and gov- ernment CREDITORS and BANKS (generally those from GROUP OF 10 coun- tries), to consider bilateral RESCHEDULINGS of the debtor country’s DEBT in order to avoid MORATORIUM or DEFAULT. So named as the meetings are coor- dinated via the French finance ministry.	palgrave	46.61	12.8	0	12.25	15.3	12.91	15.75	15.51
PARITY	See CONVERSION .	palgrave	-6.7	14.7	0	7.1	12.5	11.63	1.5	20.8
PARKING	The transfer of ASSETS, LIABILITIES, or CASH FLOWS to another party, without the transfer of associated RISKS, for the purpose of altering a FINANCIAL STATEMENT. Parking is illegal in many jurisdictions as it conveys a false profile of financial standing.	palgrave	34.26	13.5	0	13.17	14	10.94	14	14
PARTIAL BARRIER OPTION	A BARRIER OPTION with a BARRIER that is only in effect during a portion of the option’s life, often one week, month, or quar- ter of a multiquarter or multiyear deal. See also POINT BARRIER OPTION.	palgrave	53.21	10.3	0	7.54	8.8	8.48	11.5	10.53
PARTIAL INSURANCE	An INSURANCE POLICY providing fractional RISK TRANSFER in exchange for a smaller PREMIUM. For INSUREDS with the proper RISK TOLERANCE, the lower cost of protection achieved via partialinsurance may be preferable under a cost/benefit framework. Fractional cover- age is generally achieved through DEDUCTIBLES, EXCLUSIONS, and/or POLICY CAPS. See also FULL INSURANCE.	palgrave	33.1	11.8	13.8	16.52	14.1	11.08	8.875	13.75
PARTIAL LOOKBACK OPTION	An OVER-THE-COUNTER COMPLEX OPTION that allows the purchaser to reset the STRIKE PRICE on a particular evaluation date if the option is OUT-OF-THE-MONEY. Also known as RESET OPTION. See also LOOKBACK OPTION.	palgrave	52.15	8.6	10.5	11.99	9.8	8.61	6	8.03
PARTIAL PLAN TERMINATION	A CORPORATE FINANCE scheme designed to take advantage of an overfunded PENSION PLAN to free up cash for use in other endeavors. Under the termination transaction, the pension plan is split into two distinct components and the overfunded portion is terminated, releasing cash into the general corporate account. Partial plan termination only works when the total plan is overfunded with respect to both retirees and current employees.	palgrave	40.38	13.2	15.9	14.34	15.5	10.16	16.166667	14.89
PARTIAL RECOURSE LOAN	A LOAN where the lending BANK must initially rely on CASH FLOWS from the ASSET or project being financed for repayment but may then turn to the BORROWER for repayment. Also known as LIMITED RECOURSE LOAN. See also FULL RECOURSE LOAN, NONRECOURSE, NONRECOURSE LOAN, RECOURSE.	palgrave	64.71	8	11.9	11.01	10.1	8.59	8.833333	10.44
PARTICIPATING DIVIDEND	An additional DIVIDEND paid to INVESTORS holding a company’s participating PREFERRED STOCK. See also PARTICIPA-TING FORWARD.	palgrave	4.14	14.7	0	18.81	14.6	12.92	5.5	15.7
PARTICIPATING FORWARD	A FORWARD CONTRACT with a feature that allows the first party to share in any gains earned by the second party on a predetermined basis. In exchange, the second party receives a more favorable forward price.	palgrave	61.67	9.1	0	9.63	10.1	8.48	9	9.42
PARTICIPATING OPTION	An OPTION CONTACT with a feature that allows the buyer to only benefit from a certain amount of any gains earned; the option seller retains a portion of the profits, in return for levying a smallerPREMIUM.	palgrave	43.4	16.2	0	10.22	18.8	11.56	20	16.62
PARTICIPATING POLICY	An INSURANCE CONTRACT where the INSURED receives periodic DIVIDENDS from the INSURER, thus sharing in the insurer’s overall profitability. The participating policy essentially grants the insured an increasing PREMIUM rebate as the insurer’s UNDERWRITING and INVESTMENT MANAGEMENT performance improves.	palgrave	0.92	18	0	21.41	20.1	14.32	17.75	23.18
PARTICIPATING PREFERRED STOCK	A form of PREFERRED STOCK that pays INVESTORS a standard preferred DIVIDEND and a portion of a COMMONSTOCK dividend if certain financial performance targets are met. Such issues are relatively rare.	palgrave	47.28	10.5	0	13.45	11.8	11.03	10.75	12.65
PARTICIPATION CERTIFICATE	A SECURITY that represents an interest in an underlying POOL of ASSETS, generally MORTGAGES; the term is often used generically to refer to MORTGAGE-BACKED SECURITIES. See also PASS-THROUGH SECURITY.	palgrave	22.92	13.7	0	15.13	13.6	10.89	11.75	15.46
PARTLY PAID SHARES	The SHARES of a company that have not been paid up to the full PAR VALUE at the time of initial issuance, and on which INVESTORS are subject to a further call for additional CAPITAL. The mech- anism is relatively uncommon, used primarily in very large transactions or PRIVATIZATIONS. See also FULLY PAID SHARES.	palgrave	61.67	9.1	12.5	9.51	10.1	8.33	11.666667	11.64
PARTNER	A participant in a form of an unincorporated business organiza- tion. Depending on the structure of the organization, a partner may have unlimited personal responsibility with regard to incurred DEBTS. See alsoGENERAL PARTNERSHIP, LIMITED PARTNERSHIP, PARTNERSHIP, SILENT PARTNERSHIP.and COLLATERALIZED MORTGAGE OBLIGATIONS issued by private- label CONDUITS, and COLLATERALIZED BOND OBLIGATIONS and COLLATERALIZED LOAN OBLIGATIONS issued by BANKS and SECURITIES FIRMS.	palgrave	0.42	18.2	18.2	21.17	20.7	11.73	17	17.33
PASSING THE BOOK	The practice followed by large international BANKS and other FINANCIAL INSTITUTIONS of transferring OPEN POSITIONS in FOREIGN EXCHANGE and other ASSETS that trade on a 24-hour basis among TRADING centers as each one becomes the primary locus of trading activity during part of the business day.	palgrave	16.33	22.4	0	14.75	27.1	12.1	30	24.49
PASSIVE FUND	A FUND that seeks to match a BENCHMARK market INDEX through a replication strategy, with no attempt to outperform the bench- mark. Passive funds, such as INDEX FUNDS, feature lower costs than ACTIVE FUNDS.	palgrave	71.14	7.6	0	10.73	10.9	10.98	9	10.33
PASSIVE INVESTMENT STRATEGY	A process of managing a PORTFOLIO of SECURITIES by relying on a minimum amount of ASSET reallocation; pas- sive strategies are often implemented through INDEXING. See also ACTIVE INVESTMENT STRATEGY, INDEX FUND.	palgrave	29.86	13.1	0	14.15	13.1	13.31	13	18.9
PASSIVE LOSS RULES	Rules that limit the amount of deductions or INCOME that can be sheltered from TAXES. Deductions on passive losses are generally limited to an amount equal to earnings from passive sources; in addition, losses and gains must generally come from similar businesses or INVESTMENTS.	palgrave	40.69	13.1	0	13.29	14.8	10.47	15.5	15.16
PASSIVE RETENTION	A state where a company unknowingly retains RISK and is therefore not actively managing exposure through RESERVES or SELF-INSURANCE. Passive retentions can lead to unexpected losses. See alsoRETENTION, RISK RETENTION.	palgrave	27.49	11.9	13.6	16.62	13.1	12.03	7.333333	16
PASSPORTING	The ability for BANKS and other FINANCIAL INSTITU- TIONS operating in the EUROPEAN UNION to provide services in all EU coun- tries once they have been approved to provide such services in any one country.	palgrave	44.41	15.8	0	10.98	19	11.69	22.5	19.71
PATENT	Exclusive rights that are granted by a government authority to the designer or inventor of an innovative product or service, generally for a speci- fied period of time (e.g., the WORLD TRADE ORGANIZATION recommends a minimum of 20 years). A patent is typically classified on the BALANCE SHEET as an INTANGIBLE.	palgrave	28.67	15.6	0	11.55	15.3	12.33	19.75	20.4
PATH-INDEPENDENT OPTION	A VANILLA or COMPLEX OPTION whose PAYOFF at EXPIRY or EXERCISE is dependent solely on the price of theUNDERLYING reference ASSET at expiry or exercise. Common path-independ- ent options include BINARY OPTIONS, MULTI-INDEX OPTIONS, COMPOUND OPTIONS, CHOOSER OPTIONS, CONTINGENT PREMIUM OPTIONS, DEFERRED PAYMENT AMERICAN OPTIONS, EXPLODING OPTIONS, and FORWARD START OPTIONS. See also PATH-DEPENDENT OPTION.	palgrave	19.06	15.1	15	18.39	17.9	11.72	13.5	13.87
PATHFINDER PROSPECTUS	In the United Kingdom, a RED HERRING.	palgrave	81.29	3.7	0	4.07	2.9	6.24	2.5	2.8
PAY AS YOU EARN (PAYE)	In the United Kingdom, a scheme where employ- ers deduct from the current salary of employees the amount of estimated TAX due and payable.	palgrave	64.04	10.3	0	10.1	13.1	10.75	14	12.93
PAY LATER OPTION	See CONTINGENT PREMIUM OPTION.	palgrave	8.2	13.1	0	14.5	12.4	15.68	3	21.6
PAYABLE	See ACCOUNTS .	palgrave	35.61	8.8	0	1.3	7.8	11.63	0.5	0.8
PAYBACK PERIOD	Also know as PAYBACK RULE.where CI is the initial capital investment, CFp.a. is the annual cash flow from the investment. Also known as PAYBACK PERIOD. See also INTERNAL RATE OF RETURN, NET PRESENT VALUE.	palgrave	60.01	7.7	11.2	9.32	7.9	7.91	6.666667	9.23
PAYE	See PAY AS YOU EARN.	palgrave	117.16	-1.9	0	-4.33	-4	0.25	1.5	2
PAYEE	A party that is due a payment, as under a CHECK, DRAFT, BILL OF EXCHANGE, or other CONTRACT. See also PAYER.	palgrave	77.74	5	0	3.86	3.6	6.41	4.25	4.2
PAYER	A party that is required to make a payment, as under a CHECK, DRAFT, BILL OF EXCHANGE, or other CONTRACT. See also PAYEE.	palgrave	76.72	5.4	0	4.97	4.6	6.95	4.75	4.6
PAYER EXTENDIBLE SWAP	An EXTENDIBLE SWAP that is formed from a combination of a fixed payer SWAP and a PAYER SWAPTION.	palgrave	70.13	8	0	7.54	8.2	10.67	9	9.42
PAYER SWAPTION	A SWAPTION granting the buyer the right to enter into an OVER-THE-COUNTER INTEREST RATE SWAP to pay FIXED RATES and receive FLOATING RATES. The buyer is likely to exercise the swaption as float- ing rates rise above a particular STRIKE PRICE. Also known as PUT SWAPTION. See also RECEIVER SWAPTION.	palgrave	67.25	7	9.5	9.9	8.3	8.36	6.5	8.2
PAYING AGENT	A BANK of other FINANCIAL INSTITUTION that is respon- sible for disbursing INTEREST and PRINCIPAL on a particular DEBT facility or instrument.	palgrave	15.31	16.6	0	14.1	15.5	12.62	19	23.35
PAYMENT DATE	The date on which INTEREST and/or PRINCIPAL due on a SECURITY is paid to INVESTORS.	palgrave	56.25	9.1	0	8.05	7.7	8.59	10.5	14
PAYMENT IN KIND	Payment that is made in goods or services rather than cash.	palgrave	94.15	2.9	0	6.82	5	5.62	4.5	4.4
PAYMENT IN KIND (PIK) SECURITY	A SECURITY that pays COUPONS or DIVIDENDS in the form of additional securities rather than cash (e.g., PIK BONDS pay interest in the form of additional PIK bonds, PIK PREFERRED STOCK pays dividends with additional PIK preferreds). PIK securities are gen- erally issued by companies that have difficulty raising cash or are attempting to preserve cash to fund corporate operations. See also RESET PAYMENT IN KIND BOND.	palgrave	40.38	13.2	15.9	12.54	14.4	10.87	16.166667	15.49
PAYMENT NETTING	A NETTING arrangement where an institution and its COUNTERPARTY agree to net all payments in the normal course of business. See also NOVATION, SET-OFF.	palgrave	59.3	8	0	11.82	9.7	8.84	7	11.47
PAYMENT TERMS	The specific terms defined by a seller or supplier for buyers or DEBTORS, indicating the amount of DISCOUNT that will be granted if payments are made over particular time horizons.	palgrave	41.03	15	0	12.14	17.3	11.97	19	17.33
PAYOFF	The economic result generated by a DERIVATIVE CONTRACT based on the market price of the UNDERLYING at a point in time or at the MATURITY of the contract. See also PROFILE.	palgrave	47.28	10.5	0	8.41	7.8	8.99	10.25	12.65
PAYOR BANK	A BANK that is the DRAWEE of a DRAFT or CHECK. See alsoCOLLECTING BANK.	palgrave	89.75	2.5	0	3.26	1.6	7.37	3	5.66
PAYOUT RATIO	The amount of corporate earnings paid out to SHARE- HOLDERS in the form of COMMON STOCK DIVIDENDS, calculated as:where DIVn is the dividend paid in period n and EPSn is the EARNINGS PER SHARE achieved in period n. See also DIVIDEND YIELD, PLOWBACK RATIO.	palgrave	57.61	10.7	0	9.75	12.2	10.47	14.5	13.35
PBOC	See PEOPLE’S BANK OF CHINA.	palgrave	83.32	2.9	0	3.8	2.7	7.04	1.5	2
PEGGING	(1) In the FOREIGN EXCHANGE markets, the process of linking the value of a national CURRENCY to the value of a foreign currency (or a BASKET of currencies). This implies that the national currency is not free-floating, butdependent on the MONETARY POLICY and TRADE activities of reference coun- tries. (2) In the SECURITIES markets, an illegal practice where manipulators attempt to keep the price of a listed security trading close to its PAR VALUE. (3) In the NEW ISSUE market, the legal practice of stabilizing the price of a new offering, generally through buying efforts coordinated by the LEAD MANAGER.(1) See also CRAWLING PEG, MANAGED FOREIGN EXCHANGE RATE.	palgrave	8.21	25.5	0	12.32	29.9	11.87	34.5	27.53
PENNANT	A TECHNICAL ANALYSIS charting figure of a SECURITY or mar- ket that resembles the FLAG, but features a narrowing of the tip as the peaks and troughs draw closer together; once at the tip of the pennant, the price of the security or market is expected to rise or fall sharply.	palgrave	28.17	22	0	8.61	24.8	10.81	33.5	25.11
PENNY STOCK	The COMMON STOCK of a company that trades for less than $1 per share, generally associated with a firm that has a short his- tory of financial performance or one that has entered a phase of FINANCIAL DISTRESS and has been delisted from a larger EXCHANGE. Penny stocks are traded OVER-THE-COUNTER and are quoted on the PINK SHEETS.	palgrave	50.5	13.4	0	9.93	15.3	10.25	18	14.36
PENSION FUND	See PENSION PLAN.	palgrave	93.81	0.9	0	1.52	3.6	9.05	0.5	1.2
PENSION MORTGAGE	In the United Kingdom, a form of MORTGAGE where the MORTGAGOR pays the lending BANK periodic INTEREST payments, and makes additional contributions to a PENSION account, which is designed to provide funds for repayment of PRINCIPAL when the mortgagor retires.	palgrave	22.42	20.1	0	14.52	24.4	12.33	26	22
PENSION SYSTEM	A national system for defining and administering PEN- SION PLANS, either at a public level or within the private sector. A system may be structured on the basis of UNFUNDED PENSIONS or FUNDED PENSIONS.	palgrave	54.22	9.9	0	10.38	10.3	10.98	9	10.33
PEOPLE PILL	An ANTITAKEOVER DEFENSE where a well-regarded management team threatens to depart, en masse, in the event of a TAKEOVER. See also POISON PILL.	palgrave	68.26	6.6	0	10.54	8.9	10.39	6.25	9.82
PEOPLE’S BANK OF CHINA (PBOC)	The CENTRAL BANK of the People’s Republic of China, established in 1948 and granted central banking powers in 1983. PBOC is responsible for issuing and enforcing REGULATIONS impact- ing its domestic financial markets and institutions, developing and imple- menting MONETARY POLICY, issuing CURRENCY and managing FOREIGN EXCHANGE activities, managing official RESERVES and operating national payment SETTLEMENTS.	palgrave	0.76	20.1	0	19.03	22.5	14.61	24.5	24.77
PER CAPITA INCOME	The average amount of INCOME earned by a defined group, system, or country, which is determined by dividing total income by the number of people in the group, system, or country. Per capita income can be used for comparative purposes across groups and over time.	palgrave	57.1	10.9	0	10.22	12.6	8.96	13.75	13.44

OSCILLATOR

In TECHNICAL ANALYSIS, a measure of market movements used to identify OVERBOUGHT or OVERSOLD conditions; different oscillators exist, including the relative strength of the market (average number of days ending up divided by number of days ending down).

palgrave

0

15.99

20.5

0

15.39

24.3

11.75

29

24.67

OSE

See OSAKA STOCK EXCHANGE.

palgrave

0

50.5

7.2

0

7.25

6.5

7.78

2

11.6

OTC

See OVER-THE-COUNTER.

palgrave

0

35.61

8.8

0

18.7

26.7

0.1

1

0.8

OUT-OF-THE-MONEY

A condition where the price of an UNDERLYING ref- erence ASSET is lower than the STRIKE PRICE for a CALL OPTION, or higher than the strike for a PUT OPTION, meaning the CONTRACT has no immediate INTRINSIC VALUE if EXERCISED or sold. See also AT-THE-MONEY, IN-THE-MONEY, MONEYNESS.

palgrave

0

47.62

12.5

0

10.51

13.8

9.84

14.75

14.51

OUTPERFORMANCE OPTION

An OVER-THE-COUNTER COMPLEX OPTION that grants the buyer a PAYOFF based on the degree to which a mar- ket reference or SPREAD outperforms a predefined STRIKE PRICE. See alsoSPREAD OPTION, UNDERPERFORMANCE OPTION.

palgrave

0

55.24

9.5

0

14.15

13.2

11.83

10.5

11.4

OUTSIDE DIRECTOR

In the United States, a board DIRECTOR that is not related to the company or its EXECUTIVE MANAGEMENT in any fashion, i.e., the director has no former employment ties, or any existing business, consult- ing, or personal relationships with executives. Outside directors are typically considered to be independent for GOVERNANCE purposes. See also INSIDE DIRECTOR.

palgrave

0

27.52

14

17.1

13.92

14.1

10.29

15.166667

18.23

OUTSIDER SYSTEM

A corporate ownership system where no significant con- trolling interests exist and SHAREHOLDER influence over the GOVERNANCE and management processes is theoretically strong. The outsider system is found in the United States, the United Kingdom, Canada, and Australia. See also INSIDER SYSTEM.

palgrave

0

31.89

12.3

14.1

16.12

13.9

11.1

10.666667

16.08

OUTSTANDING SHARES

The total amount of SHARES issued by a com- pany and which are currently held by INVESTORS, including shares held by employees and executives but excluding shares that have been repurchased from the market under a TREASURY STOCK program. Also known as ISSUED AND OUTSTANDING, SHARES OUTSTANDING.CREDIT DERIVATIVE, CURRENCY DERIVATIVE, EQUITY DERIVATIVE, INTEREST RATE DERIVATIVE, WEATHER DERIVATIVE.

palgrave

0

17.17

17.9

0

16.89

21.2

10.59

22.25

19.12

OVER THE WALL

A process where bankers inform a research analyst within the BANK about an impending CORPORATE FINANCE or NEW ISSUE transaction for a company; once “over the CHINESE WALL,” the analyst can- not produce research information as it is apt to be influenced by, or contain details of, NONPUBLIC INFORMATION.

palgrave

0

13.28

23.6

0

12.96

27.5

12.19

34.5

25.31

OVERBOUGHT

A situation where a SECURITY or market has been the focus of aggressive buying over a short period of time, and which may be due for a correction due to a relative lack of new buyers. See also OVERSOLD.

palgrave

0

60.14

9.7

0

6.67

8.1

9.06

12.75

13.95

OVERCOLLATERALIZATION TEST

A COLLATERAL-related financial test performed in a COLLATERALIZED DEBT OBLIGATION or SECURITIZATION structure to determine whether the CASH FLOW WATERFALL can make pay- ments to increasingly SUBORDINATED TRANCHES. The form of the test is given by:(PRINCIPAL value of the collateral pool)/(Principal of a target TRANCHE + Principal of all tranches ranking SENIOR to the target)The test is considered successful if the interest coverage ratio is greater than or equal to the specified TRIGGER.

palgrave

0

9.56

20.9

0

16.2

24

11.78

27.75

23.29

OVERHEAD

The administrative costs associated with operating a business, such as costs for salaries, rents, insurance, utilities, and supplies.

palgrave

0

27.83

13.9

0

17.86

17.9

12.42

14

18.31

OVERHEATING

A stage in the expansion of an ECONOMY or the appreci- ation in a market or ASSET where speculative factors force growth/prices to move up rapidly, at what may ultimately be an unsustainable pace.

palgrave

0

36.97

16.6

0

10.46

18.1

10.9

23

20.66

OVERHEDGING

Excessive HEDGE protection that might not be required when broader PORTFOLIO exposures with “beneficial” CORRELATIONS that produce natural offsets are considered.

palgrave

0

16.32

16.2

0

21.64

20.9

14.45

18.5

23.64

OVERINSURANCE

Any instance where an INSURED carries too much INSURANCE coverage against a specific PERIL. Since an insured can never profit from a CLAIM (being entitled only to fair restitution related to the amount lost), overinsurance results in wasted PREMIUM payments. See alsoUNDERINSURANCE

palgrave

0

41.7

12.7

0

15.2

16

11.45

15

16.97

OVERISSUE

Issuance of COMMON STOCK by a company in excess of its authorized SHARE limit. The corporate registrar is typically responsible for ensuring that overissue does not occur.

palgrave

0

40.85

10.9

0

12.87

10.6

11.32

10.25

14.29

OVERLAPPING INSURANCE

A situation where an INSURED has two or more INSURANCE policies covering the same RISK. If a CLAIM is made, the insured will not be able to receive payment under all policies, since insurance cannot result in a net profit; the amount of the claim is generally divided on PRO-RATA basis between the policies. See also APPORTIONMENT, DIVIDED COVER, PRIMACY.

palgrave

0

51.18

11.1

13.6

10.44

11.8

8.84

13.333333

12.67

OVERLINED

A temporary situation where a COMMERCIAL PAPER ISSUER has repaid all outstanding NOTES and has excess SWINGLINE availability.

palgrave

0

27.83

13.9

0

16.88

15.8

13.3

14

18.31

OVERNIGHT MONEY

Funds borrowed on an overnight basis by a BANK or other financial institution. Such overnight funding is payable within one day, and can be accessed through direct interbank borrowings (unsecured) or OVERNIGHT REPURCHASE AGREEMENTS (secured).

palgrave

0

53.71

10.1

0

15.72

15.3

11.27

11.75

13.86

OVERNIGHT RATE

Any INTEREST RATE reference that is computed on, and reflective of, an overnight period, e.g., EONIA, SONIA.REVERSE REPURCHASE AGREEMENT. See also OPEN REPURCHASE AGREEMENT, TERM REPURCHASE AGREEMENT.

palgrave

0

32.39

12.1

0

17.16

15.7

11.32

11.25

14.29

OVERSOLD

A situation where a SECURITY or market has been the focus of aggressive selling over a short period of time, and which may be due for a price rebound due to a lack of additional sellers. See also OVERBOUGHT.

palgrave

0

60.14

9.7

0

7.43

8.7

9.06

12.25

12.93

OVERSUBSCRIPTION

A situation where the number of ORDERS for a NEW ISSUE of SECURITIES is greater than the available SUPPLY, suggesting the price of the security will rise sharply at launch. If an EQUITY issue is oversubscribed, the UNDERWRITERS may exercise the GREENSHOE and float more shares; if a DEBT issue is oversubscribed, the issuer may authorize the underwriters to increase the size of the deal. See also UNDERSUBSCRIPTION.

palgrave

0

48.43

12.1

14.6

12.19

14.1

9.87

15.333333

14.96

OVERTRADING

See CHURNING.

palgrave

0

77.91

2.9

0

1.3

7.8

11.63

0

0.8

P/E RATIO

See PRICE/EARNINGS RATIO.

palgrave

0

59.97

5.6

0

15.03

16.2

14.31

0.5

1.2

PAASCHE’S INDEX

See CURRENT WEIGHTED INDEX.

palgrave

0

50.5

7.2

0

10.15

8.8

15.68

1

1.6

PAC BOND

See PLANNED AMORTIZATION CLASS BOND.

palgrave

0

66.4

5.2

0

14.24

11.2

13.36

2.5

10

PAC MAN DEFENSE

An ANTITAKEOVER DEFENSE where a TARGET company initiates a counterbid for the company that is attempting a HOSTILE TAKEOVER of its operations. The counterbid may involve the use of a consider- able amount of LEVERAGE, making the defense strategy financially risky.

palgrave

0

33.75

13.6

0

13.87

14.5

10.05

15.75

16

PACKAGE INSURANCE

See MULTILINE POLICY.

palgrave

0

9.21

12.7

0

9.23

9.9

14.31

2.5

27.87

PAID-IN CAPITAL

CAPITAL received by a company from the flotation of COMMON STOCK through an INITIAL PUBLIC OFFERING, RIGHTS ISSUE, or ADD-ON. Also known as PAID-IN SURPLUS. See also RETAINED EARNINGS, CAPITAL SURPLUS.

palgrave

0

52.56

8.5

9.7

11.75

9.7

9.24

5.5

5.41

PAID-IN SURPLUS

(1) A measure of an INSURER’s SOLVENCY, computed as the excess of an insurer’s admitted ASSETS over the total value of its LIABILITIES and minimum required CAPITAL. (2) See PAID-IN CAPITAL.

palgrave

0

23.09

17.7

0

11.56

18.2

11.29

24.5

20.14

PAID-UP POLICY

In the United Kingdom, an ENDOWMENT ASSURANCEpolicy where the INSURED ceases to make PREMIUM payments, and where P the SURRENDER VALUE is then used to purchase some amount of cheaper life assurance coverage.

palgrave

0

29.52

17.3

0

13.53

20

11.02

22.5

20.47

PAINTING THE TAPE

See DAISY CHAIN.

palgrave

0

119.19

-2.7

0

-0.46

2.1

0.15

0.5

1.2

PAIRED SHARES

The COMMON STOCK of two companies, managed by the same EXECUTIVE MANAGEMENT team, that are traded together through a single certificate. Also known as STAPLED STOCK.

palgrave

0

49.82

9.5

0

12.17

10.4

9.14

8

11.35

PAIRS TRADING

An INVESTMENT strategy that involves going LONG of one STOCK (perceived to be CHEAP) and SHORT of a second stock (RICH) in expectation of capturing the SPREAD movements between the two over some time horizon, typically based on some impending event (e.g., earnings announcements). Since the investor hopes to capture the spread, the strategy is MARKET NEUTRAL, meaning the absolute level of the market is not relevant to success. Pairs trading is often done within a specific industry sector, e.g., one automobile stock versus a second one, but is also characteristic of takeover and acquisition stocks in RISK ARBITRAGE.

palgrave

0

37.98

16.2

16.3

12.78

19.9

11.17

21.833333

18.86

PAPER LOSS

See UNREALIZED LOSS.

palgrave

0

34.59

9.2

0

7.32

8.3

9.05

1.5

14.53

PAPER MARKET

See PAPER SWAP.

palgrave

0

93.81

0.9

0

-2.38

0.5

9.05

0.5

1.2

PAPER PROFIT

See UNREALIZED PROFIT.

palgrave

0

9.21

12.7

0

11.15

11.5

14.31

1.5

14.53

PAPER SWAP

(1) An OVER-THE-COUNTER SWAP based on a physical COMMODITY (often an energy product) that is transacted strictly on paper, with no attempt or intent to make or take delivery of the underlying phys- ical goods; paper swaps are always settled on a cash, or financial, basis, or are OFFSET prior to EXPIRY. (2) A COMMODITY DERIVATIVE involving the exchange of fixed and floating prices related to paper products, such as pulp, paperboard, and newsprint. The paper swap can serve as a HEDGE for firms exposed to the selling or buying price of paper products. (1) Also known asPAPER MARKET.

palgrave

0

21.23

22.6

0

10.81

26.5

12.31

31.75

24.65

PAR

See VALUE.

palgrave

0

35.61

8.8

0

-7.41

0.8

0.1

0

0.8

PAR BOND

(1) A BOND that trades at its PAR VALUE. (2) A form of BRADY BOND with no price discount but with a smaller INTEREST COUPON than the DISCOUNT BOND alternative. (1) See also PREMIUM BOND.

palgrave

0

61.33

13.4

0

7.03

16.5

10.79

20.5

17.43

PAR VALUE

The stated value, or FACE VALUE, of a SECURITY established at the time of issuance, and generally also its REDEMPTION VALUE. For BONDS and NOTES it is the amount to be repaid to INVESTORS at MATURITY, for COMMON STOCK or PREFERRED STOCK it is simply an artificial value that has no bearing after the initial launch of SHARES. Also known as NOMINAL VALUE, PAR.TERM STRUCTURE, ZERO COUPON YIELD CURVE.BACK LOAN.

palgrave

0

56.29

11.2

11.9

10.28

13.1

10.43

14

13.32

PARALLEL MONEY MARKETS

A sector of the financing market that occurs between users and suppliers of short-term funds without the use of specialized INTERMEDIARIES, such as DISCOUNT HOUSES. The development of parallel money markets is a form of DISINTERMEDIATION.

palgrave

0

27.83

13.9

0

14.5

14.1

10.67

12.5

14.98

PARAMETRIC TRIGGER

A conditional event in an INSURANCE-LINKED SECURITY that results in suspension of INTEREST and/or PRINCIPAL when a specific damage metric reaches a certain value. The metric is generally based on location and severity parameters. See also INDEMNITY TRIGGER, INDEX TRIGGER.

palgrave

0

24.14

13.2

14.6

14.78

12.7

12.19

10.666667

17.32

PARASOL POLICY

See DIFFERENCE IN CONDITIONS INSURANCE.

palgrave

0

15.64

12.3

0

17.72

14

10.2

4.5

18

PARENT

The primary operating entity in a CORPORATION, and often the one with the most significant operations and financial resources. A par- ent company may be called on by potential CREDITORS to GUARANTEE the LIABILITIES of any SUBSIDIARIES. See also HOLDING COMPANY.

palgrave

0

32.19

12.2

15

12.69

10.8

10.86

11.166667

16.21

PARENT ORDER

An overarching ORDER to execute a particular transaction that can be divided up into smaller CHILD ORDERS. A parent order is com- monly used as a fundamental starting point in ALGORITHMIC TRADING. See also ORDER GENERATION LOGIC, ORDER PLACEMENT LOGIC.

palgrave

0

32.6

12

12.5

11.99

10.3

10.61

8.333333

13.32

PARI PASSU

Literally “on equal standing.” In FINANCE it applies to granting a party the same rights/seniority that have been granted to others. A pari passu clause is often included in VENTURE CAPITAL, BOND, and LOAN agreements to ensure that seniority classes remain unaffected by future financial transactions. See also NEGATIVE PLEDGE, STRUCTURAL SUBORDINATION.

palgrave

0

37

12.4

13.6

15.19

14.6

12.39

12

13.07

PARIS CLUB MEETING

A meeting between a sovereign DEBTOR and gov- ernment CREDITORS and BANKS (generally those from GROUP OF 10 coun- tries), to consider bilateral RESCHEDULINGS of the debtor country’s DEBT in order to avoid MORATORIUM or DEFAULT. So named as the meetings are coor- dinated via the French finance ministry.

palgrave

0

46.61

12.8

0

12.25

15.3

12.91

15.75

15.51

PARITY

See CONVERSION .

palgrave

0

-6.7

14.7

0

7.1

12.5

11.63

1.5

20.8

PARKING

The transfer of ASSETS, LIABILITIES, or CASH FLOWS to another party, without the transfer of associated RISKS, for the purpose of altering a FINANCIAL STATEMENT. Parking is illegal in many jurisdictions as it conveys a false profile of financial standing.

palgrave

0

34.26

13.5

0

13.17

14

10.94

14

PARTIAL BARRIER OPTION

A BARRIER OPTION with a BARRIER that is only in effect during a portion of the option’s life, often one week, month, or quar- ter of a multiquarter or multiyear deal. See also POINT BARRIER OPTION.

palgrave

0

53.21

10.3

0

7.54

8.8

8.48

11.5

10.53

PARTIAL INSURANCE

An INSURANCE POLICY providing fractional RISK TRANSFER in exchange for a smaller PREMIUM. For INSUREDS with the proper RISK TOLERANCE, the lower cost of protection achieved via partialinsurance may be preferable under a cost/benefit framework. Fractional cover- age is generally achieved through DEDUCTIBLES, EXCLUSIONS, and/or POLICY CAPS. See also FULL INSURANCE.

palgrave

0

33.1

11.8

13.8

16.52

14.1

11.08

8.875

13.75

PARTIAL LOOKBACK OPTION

An OVER-THE-COUNTER COMPLEX OPTION that allows the purchaser to reset the STRIKE PRICE on a particular evaluation date if the option is OUT-OF-THE-MONEY. Also known as RESET OPTION. See also LOOKBACK OPTION.

palgrave

0

52.15

8.6

10.5

11.99

9.8

8.61

6

8.03

PARTIAL PLAN TERMINATION

A CORPORATE FINANCE scheme designed to take advantage of an overfunded PENSION PLAN to free up cash for use in other endeavors. Under the termination transaction, the pension plan is split into two distinct components and the overfunded portion is terminated, releasing cash into the general corporate account. Partial plan termination only works when the total plan is overfunded with respect to both retirees and current employees.

palgrave

0

40.38

13.2

15.9

14.34

15.5

10.16

16.166667

14.89

PARTIAL RECOURSE LOAN

A LOAN where the lending BANK must initially rely on CASH FLOWS from the ASSET or project being financed for repayment but may then turn to the BORROWER for repayment. Also known as LIMITED RECOURSE LOAN. See also FULL RECOURSE LOAN, NONRECOURSE, NONRECOURSE LOAN, RECOURSE.

palgrave

0

64.71

8

11.9

11.01

10.1

8.59

8.833333

10.44

PARTICIPATING DIVIDEND

An additional DIVIDEND paid to INVESTORS holding a company’s participating PREFERRED STOCK. See also PARTICIPA-TING FORWARD.

palgrave

0

4.14

14.7

0

18.81

14.6

12.92

5.5

15.7

PARTICIPATING FORWARD

A FORWARD CONTRACT with a feature that allows the first party to share in any gains earned by the second party on a predetermined basis. In exchange, the second party receives a more favorable forward price.

palgrave

0

61.67

9.1

0

9.63

10.1

8.48

9

9.42

PARTICIPATING OPTION

An OPTION CONTACT with a feature that allows the buyer to only benefit from a certain amount of any gains earned; the option seller retains a portion of the profits, in return for levying a smallerPREMIUM.

palgrave

0

43.4

16.2

0

10.22

18.8

11.56

20

16.62

PARTICIPATING POLICY

An INSURANCE CONTRACT where the INSURED receives periodic DIVIDENDS from the INSURER, thus sharing in the insurer’s overall profitability. The participating policy essentially grants the insured an increasing PREMIUM rebate as the insurer’s UNDERWRITING and INVESTMENT MANAGEMENT performance improves.

palgrave

0

0.92

18

0

21.41

20.1

14.32

17.75

23.18

PARTICIPATING PREFERRED STOCK

A form of PREFERRED STOCK that pays INVESTORS a standard preferred DIVIDEND and a portion of a COMMONSTOCK dividend if certain financial performance targets are met. Such issues are relatively rare.

palgrave

0

47.28

10.5

0

13.45

11.8

11.03

10.75

12.65

PARTICIPATION CERTIFICATE

A SECURITY that represents an interest in an underlying POOL of ASSETS, generally MORTGAGES; the term is often used generically to refer to MORTGAGE-BACKED SECURITIES. See also PASS-THROUGH SECURITY.

palgrave

0

22.92

13.7

0

15.13

13.6

10.89

11.75

15.46

PARTLY PAID SHARES

The SHARES of a company that have not been paid up to the full PAR VALUE at the time of initial issuance, and on which INVESTORS are subject to a further call for additional CAPITAL. The mech- anism is relatively uncommon, used primarily in very large transactions or PRIVATIZATIONS. See also FULLY PAID SHARES.

palgrave

0

61.67

9.1

12.5

9.51

10.1

8.33

11.666667

11.64

PARTNER

A participant in a form of an unincorporated business organiza- tion. Depending on the structure of the organization, a partner may have unlimited personal responsibility with regard to incurred DEBTS. See alsoGENERAL PARTNERSHIP, LIMITED PARTNERSHIP, PARTNERSHIP, SILENT PARTNERSHIP.and COLLATERALIZED MORTGAGE OBLIGATIONS issued by private- label CONDUITS, and COLLATERALIZED BOND OBLIGATIONS and COLLATERALIZED LOAN OBLIGATIONS issued by BANKS and SECURITIES FIRMS.

palgrave

0

0.42

18.2

21.17

20.7

11.73

17

17.33

PASSING THE BOOK

The practice followed by large international BANKS and other FINANCIAL INSTITUTIONS of transferring OPEN POSITIONS in FOREIGN EXCHANGE and other ASSETS that trade on a 24-hour basis among TRADING centers as each one becomes the primary locus of trading activity during part of the business day.

palgrave

0

16.33

22.4

0

14.75

27.1

12.1

30

24.49

PASSIVE FUND

A FUND that seeks to match a BENCHMARK market INDEX through a replication strategy, with no attempt to outperform the bench- mark. Passive funds, such as INDEX FUNDS, feature lower costs than ACTIVE FUNDS.

palgrave

0

71.14

7.6

0

10.73

10.9

10.98

9

10.33

PASSIVE INVESTMENT STRATEGY

A process of managing a PORTFOLIO of SECURITIES by relying on a minimum amount of ASSET reallocation; pas- sive strategies are often implemented through INDEXING. See also ACTIVE INVESTMENT STRATEGY, INDEX FUND.

palgrave

0

29.86

13.1

0

14.15

13.1

13.31

13

18.9

PASSIVE LOSS RULES

Rules that limit the amount of deductions or INCOME that can be sheltered from TAXES. Deductions on passive losses are generally limited to an amount equal to earnings from passive sources; in addition, losses and gains must generally come from similar businesses or INVESTMENTS.

palgrave

0

40.69

13.1

0

13.29

14.8

10.47

15.5

15.16

PASSIVE RETENTION

A state where a company unknowingly retains RISK and is therefore not actively managing exposure through RESERVES or SELF-INSURANCE. Passive retentions can lead to unexpected losses. See alsoRETENTION, RISK RETENTION.

palgrave

0

27.49

11.9

13.6

16.62

13.1

12.03

7.333333

16

PASSPORTING

The ability for BANKS and other FINANCIAL INSTITU- TIONS operating in the EUROPEAN UNION to provide services in all EU coun- tries once they have been approved to provide such services in any one country.

palgrave

0

44.41

15.8

0

10.98

19

11.69

22.5

19.71

PATENT

Exclusive rights that are granted by a government authority to the designer or inventor of an innovative product or service, generally for a speci- fied period of time (e.g., the WORLD TRADE ORGANIZATION recommends a minimum of 20 years). A patent is typically classified on the BALANCE SHEET as an INTANGIBLE.

palgrave

0

28.67

15.6

0

11.55

15.3

12.33

19.75

20.4

PATH-INDEPENDENT OPTION

A VANILLA or COMPLEX OPTION whose PAYOFF at EXPIRY or EXERCISE is dependent solely on the price of theUNDERLYING reference ASSET at expiry or exercise. Common path-independ- ent options include BINARY OPTIONS, MULTI-INDEX OPTIONS, COMPOUND OPTIONS, CHOOSER OPTIONS, CONTINGENT PREMIUM OPTIONS, DEFERRED PAYMENT AMERICAN OPTIONS, EXPLODING OPTIONS, and FORWARD START OPTIONS. See also PATH-DEPENDENT OPTION.

palgrave

0

19.06

15.1

15

18.39

17.9

11.72

13.5

13.87

PATHFINDER PROSPECTUS

In the United Kingdom, a RED HERRING.

palgrave

0

81.29

3.7

0

4.07

2.9

6.24

2.5

2.8

PAY AS YOU EARN (PAYE)

In the United Kingdom, a scheme where employ- ers deduct from the current salary of employees the amount of estimated TAX due and payable.

palgrave

0

64.04

10.3

0

10.1

13.1

10.75

14

12.93

PAY LATER OPTION

See CONTINGENT PREMIUM OPTION.

palgrave

0

8.2

13.1

0

14.5

12.4

15.68

3

21.6

PAYABLE

See ACCOUNTS .

palgrave

0

35.61

8.8

0

1.3

7.8

11.63

0.5

0.8

PAYBACK PERIOD

Also know as PAYBACK RULE.where CI is the initial capital investment, CFp.a. is the annual cash flow from the investment. Also known as PAYBACK PERIOD. See also INTERNAL RATE OF RETURN, NET PRESENT VALUE.

palgrave

0

60.01

7.7

11.2

9.32

7.9

7.91

6.666667

9.23

PAYE

See PAY AS YOU EARN.

palgrave

0

117.16

-1.9

0

-4.33

-4

0.25

1.5

2

PAYEE

A party that is due a payment, as under a CHECK, DRAFT, BILL OF EXCHANGE, or other CONTRACT. See also PAYER.

palgrave

0

77.74

5

0

3.86

3.6

6.41

4.25

4.2

PAYER

A party that is required to make a payment, as under a CHECK, DRAFT, BILL OF EXCHANGE, or other CONTRACT. See also PAYEE.

palgrave

0

76.72

5.4

0

4.97

4.6

6.95

4.75

4.6

PAYER EXTENDIBLE SWAP

An EXTENDIBLE SWAP that is formed from a combination of a fixed payer SWAP and a PAYER SWAPTION.

palgrave

0

70.13

8

0

7.54

8.2

10.67

9

9.42

PAYER SWAPTION

A SWAPTION granting the buyer the right to enter into an OVER-THE-COUNTER INTEREST RATE SWAP to pay FIXED RATES and receive FLOATING RATES. The buyer is likely to exercise the swaption as float- ing rates rise above a particular STRIKE PRICE. Also known as PUT SWAPTION. See also RECEIVER SWAPTION.

palgrave

0

67.25

7

9.5

9.9

8.3

8.36

6.5

8.2

PAYING AGENT

A BANK of other FINANCIAL INSTITUTION that is respon- sible for disbursing INTEREST and PRINCIPAL on a particular DEBT facility or instrument.

palgrave

0

15.31

16.6

0

14.1

15.5

12.62

19

23.35

PAYMENT DATE

The date on which INTEREST and/or PRINCIPAL due on a SECURITY is paid to INVESTORS.

palgrave

0

56.25

9.1

0

8.05

7.7

8.59

10.5

14

PAYMENT IN KIND

Payment that is made in goods or services rather than cash.

palgrave

0

94.15

2.9

0

6.82

5

5.62

4.5

4.4

PAYMENT IN KIND (PIK) SECURITY

A SECURITY that pays COUPONS or DIVIDENDS in the form of additional securities rather than cash (e.g., PIK BONDS pay interest in the form of additional PIK bonds, PIK PREFERRED STOCK pays dividends with additional PIK preferreds). PIK securities are gen- erally issued by companies that have difficulty raising cash or are attempting to preserve cash to fund corporate operations. See also RESET PAYMENT IN KIND BOND.

palgrave

0

40.38

13.2

15.9

12.54

14.4

10.87

16.166667

15.49

PAYMENT NETTING

A NETTING arrangement where an institution and its COUNTERPARTY agree to net all payments in the normal course of business. See also NOVATION, SET-OFF.

palgrave

0

59.3

8

0

11.82

9.7

8.84

7

11.47

PAYMENT TERMS

The specific terms defined by a seller or supplier for buyers or DEBTORS, indicating the amount of DISCOUNT that will be granted if payments are made over particular time horizons.

palgrave

0

41.03

15

0

12.14

17.3

11.97

19

17.33

PAYOFF

The economic result generated by a DERIVATIVE CONTRACT based on the market price of the UNDERLYING at a point in time or at the MATURITY of the contract. See also PROFILE.

palgrave

0

47.28

10.5

0

8.41

7.8

8.99

10.25

12.65

PAYOR BANK

A BANK that is the DRAWEE of a DRAFT or CHECK. See alsoCOLLECTING BANK.

palgrave

0

89.75

2.5

0

3.26

1.6

7.37

3

5.66

PAYOUT RATIO

The amount of corporate earnings paid out to SHARE- HOLDERS in the form of COMMON STOCK DIVIDENDS, calculated as:where DIVn is the dividend paid in period n and EPSn is the EARNINGS PER SHARE achieved in period n. See also DIVIDEND YIELD, PLOWBACK RATIO.

palgrave

0

57.61

10.7

0

9.75

12.2

10.47

14.5

13.35

PBOC

See PEOPLE’S BANK OF CHINA.

palgrave

0

83.32

2.9

0

3.8

2.7

7.04

1.5

2

PEGGING

(1) In the FOREIGN EXCHANGE markets, the process of linking the value of a national CURRENCY to the value of a foreign currency (or a BASKET of currencies). This implies that the national currency is not free-floating, butdependent on the MONETARY POLICY and TRADE activities of reference coun- tries. (2) In the SECURITIES markets, an illegal practice where manipulators attempt to keep the price of a listed security trading close to its PAR VALUE. (3) In the NEW ISSUE market, the legal practice of stabilizing the price of a new offering, generally through buying efforts coordinated by the LEAD MANAGER.(1) See also CRAWLING PEG, MANAGED FOREIGN EXCHANGE RATE.

palgrave

0

8.21

25.5

0

12.32

29.9

11.87

34.5

27.53

PENNANT

A TECHNICAL ANALYSIS charting figure of a SECURITY or mar- ket that resembles the FLAG, but features a narrowing of the tip as the peaks and troughs draw closer together; once at the tip of the pennant, the price of the security or market is expected to rise or fall sharply.

palgrave

0

28.17

22

0

8.61

24.8

10.81

33.5

25.11

PENNY STOCK

The COMMON STOCK of a company that trades for less than $1 per share, generally associated with a firm that has a short his- tory of financial performance or one that has entered a phase of FINANCIAL DISTRESS and has been delisted from a larger EXCHANGE. Penny stocks are traded OVER-THE-COUNTER and are quoted on the PINK SHEETS.

palgrave

0

50.5

13.4

0

9.93

15.3

10.25

18

14.36

PENSION FUND

See PENSION PLAN.

palgrave

0

93.81

0.9

0

1.52

3.6

9.05

0.5

1.2

PENSION MORTGAGE

In the United Kingdom, a form of MORTGAGE where the MORTGAGOR pays the lending BANK periodic INTEREST payments, and makes additional contributions to a PENSION account, which is designed to provide funds for repayment of PRINCIPAL when the mortgagor retires.

palgrave

0

22.42

20.1

0

14.52

24.4

12.33

26

22

PENSION SYSTEM

A national system for defining and administering PEN- SION PLANS, either at a public level or within the private sector. A system may be structured on the basis of UNFUNDED PENSIONS or FUNDED PENSIONS.

palgrave

0

54.22

9.9

0

10.38

10.3

10.98

9

10.33

PEOPLE PILL

An ANTITAKEOVER DEFENSE where a well-regarded management team threatens to depart, en masse, in the event of a TAKEOVER. See also POISON PILL.

palgrave

0

68.26

6.6

0

10.54

8.9

10.39

6.25

9.82

PEOPLE’S BANK OF CHINA (PBOC)

The CENTRAL BANK of the People’s Republic of China, established in 1948 and granted central banking powers in 1983. PBOC is responsible for issuing and enforcing REGULATIONS impact- ing its domestic financial markets and institutions, developing and imple- menting MONETARY POLICY, issuing CURRENCY and managing FOREIGN EXCHANGE activities, managing official RESERVES and operating national payment SETTLEMENTS.

palgrave

0

0.76

20.1

0

19.03

22.5

14.61

24.5

24.77

PER CAPITA INCOME

The average amount of INCOME earned by a defined group, system, or country, which is determined by dividing total income by the number of people in the group, system, or country. Per capita income can be used for comparative purposes across groups and over time.

palgrave

0

57.1

10.9

0

10.22

12.6

8.96

13.75

13.44