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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

PITI
Principal, Interest, Taxes, and Insurance are the components of a mortgage payment.

Point
A dollar amount paid to a lender for making a loan. A point is 1 percent of the loan amount. Also called discount points.

Portfolio
The combined investment holdings of an individual or an institution.

Power of Appointment
The power given by an individual to another in a will or trust document to determine which persons will receive an interest in his or her estate.

Power of Attorney
A legal document authorizing one individual to act as the agent or "attorney" for another (the "principal"). If the attorney is authorized to act in behalf of another for all matters, he or she has general power of attorney. Authority to act solely regarding specified situations is special power of attorney. If the authority granted extends beyond the disability of the principal, the attorney has durable power of attorney.

Preferred Stock
A class of stock that has preference over common stock in the event of the liquidation of a company's assets. Typically, preferred stockholders do not have voting rights. (See Common Stock.)

Price-to-Book Ratio
A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current price of the stock by the latest quarter's book value per share.

Price-to-Earnings Ratio
Current share price of a stock divided by its earnings per share.

Price-to-Sales Ratio
is calculated by dividing a stock’s current price by its sales per share over the trailing 12 months.

Prime Rate
The basic rate of interest on loans charged by commercial banks.

Principal

• The original balance of money loaned, excluding interest. Also, the remaining balance of a loan, excluding interest.
• Refers to the assets included in a trust that yield income. In an agency relationship, this word refers to the individual who gives authority to the agent to act on his or her behalf.

Probate
The process through which a will is proved to be valid.

Prospectus
A booklet that provides full disclosure of relevant information about a security being offered for sale.

"Prudent Investor" Rule
Legal term that refers to the duty of the fiduciary to invest and manage assets in the best interests of another.

Purchasing Managers’ Index (PMI)
is a measure of the overall performance of the manufacturing sector, based on a survey conducted with purchasing managers to determine changes in economic conditions. A reading of 50 indicates no change, a reading of greater than 50 indicates an expanding economy and a reading below 50 indicates a contracting economy.