P
Par Value
Stated value or face value. It is a nominal value of a security, which is determined by an issuer company at a minimum price.
Point
Points apply to security prices. For bonds and debentures, one point means 1% of par value.
Portfolio
A collection of investments held by an institution or a private individual.
Preferred Stock
Securities that represent an ownership interest in a corporation. Both common and preferred stockholders have ownership rights, but the preferred normally has first claim on dividends, and in the event of liquidation, assets.
Price Earnings Ratio (P/E Ratio)
A measure of the price paid for a share relative to the annual income or profit earned by the firm per share.
Calculated as:
Market Value Per Share
Earnings Per Share
Prime Rate
Interest rate which banks charge their best customers.
Prospectus
A legal document that institutions and businesses use to describe the securities they are offering for participants and buyers. It should contain the facts that an investor needs to make an informed investment decision.
R
Rally
A period of sustained increases in the prices of stocks, bonds or indexes. It is caused by a large amount of money entering the market, bidding up the prices.
Rate of Return
The ratio of money gained or lost on an investment relative to the amount of money invested.
Real Estate Investment Trust (REIT)
A tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes.
Real Rate of Return
The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects. (This method expresses the nominal rate of return in real terms, which keeps the purchasing power of a given level of capital constant over time.)
Registered Retirement Income Fund (RRIF)
A retirement fund similar to an annuity contract that pays out income to a beneficiary or a number of beneficiaries. It is designed to provide people with a constant income flow through retirement from the savings in their Registered Retirement Savings Plan.
Registered Retirement Savings Plan (RRSP)
An account that provides tax benefits for saving for retirement. RRSP refers to a provision in the Income Tax Act that allows a person to shelter financial property from income taxes.
Rule of 72
The rule is used to determine the amount of time it will take an investment to double. “72” divided by the interest rate on an investment will give the approximate number of years that it will take an investment to double.
S
Securities or Investment Dealer
Any person or firm that engages in the business of trading in securities in the capacity of an agent or principal. (This refers to securities firms, which employ investment advisors to work with retail and institutional clients and has underwriting, trading and research departments.)
Securites
Fungible, negotiable instruments representing financial value. (Transferable certificates of ownership of investment products such as notes, bonds, stocks, futures contracts and options.)
Senior Bond Issue
A corporate bond issue, which has priority over other bonds as to its claim on the company’s assets and earnings. (An example is a first mortgage bond.)
Senior Debt
A bond or other form of debt that takes priority over other debt securities sold by the issuer. (In the event the issuer goes bankrupt, senior debt must be repaid before other creditors receive any payment.)
Short-Term Bond
A bond or debenture maturing within three years
Stocks
A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings
T
T-Bills
Treasury Bills: The short-term debt of the federal government.
Thin Market
A market with a low number of buyers and sellers. Since few transactions take place, prices are often more volatile and assets are less liquid.
Trustee
An individual who holds or manages assets for the benefit of another.
U
Unit
One equal undivided share in the fund, or any sub-fund of the fund, into which the beneficial interest of this plan shall be divided, including fractions of units.
Unitholder
The registered holder of a unit, including persons jointly so registered.
V
Value Date
In the calculation of exchange rates, the date on which a transaction is judged to have occurred.
Volatility
The rate of change in the price of a security over a given time.