Financial Theory Terms

  1. Permissible Non-Bank Activities

  2. Perpetual Bond

  3. Personal Income And Outlays

  4. Peter Principle

  5. Phantom Gain

  6. Piecemeal Opinion

  7. Planned Obsolescence

  8. Population

  9. Portable Alpha

  10. Porter Diamond

  11. Porter's 5 Forces

  12. Portfolio Lender

  13. Post-Modern Portfolio Theory - PMPT

  14. Poverty

  15. Power-Distance Index - PDI

  16. Pre-Funded Bond

  17. Predatory Pricing

  18. Predictive Analytics

  19. Preferred Creditor

  20. Prepayment Model

  21. Prepayment Privilege

  22. Present Value - PV

  23. Present Value Interest Factor - PVIF

  24. Price Ceiling

  25. Price Efficiency

  26. Price Level

  27. Price Level Targeting

  28. Price Risk

  29. Price Skimming

  30. Price Stickiness

  31. Price Tension

  32. Price-Taker

  33. Price-To-Research Ratio - PRR

  34. Principal-Agent Problem

  35. Prisoner's Dilemma

  36. Private Equity

  37. Private Good

  38. Pro-Rata Tranche

  39. Probability Distribution

  40. Problem Child

  41. Process Value Analysis - PVA

  42. Product Placement

  43. Production Volume Variance

  44. Productivity

  45. Profit/Loss Ratio

  46. Profitability Index

  47. Project Finance

  48. Proportional Spread

  49. Protest Divestment

  50. Public Good

  51. Pump Priming

  52. Purchase Fund

  53. Purchasing Managers Index - PMI

  54. Purchasing Power Loss/Gain

  55. Purchasing Power Parity - PPP

  56. Pure Risk

  57. Push On A String

  58. Put-Call Parity

  59. Pyramiding

  60. Q Ratio (Tobin's Q Ratio)

  61. Quantity Demanded

  62. Quartile

  63. Radner Equilibrium

  64. Ragnar Frisch

  65. Random Variable

  66. Random Walk Theory

  67. Rate Level Risk

  68. Rate Of Return

  69. Rational Behavior

  70. Rational Pricing

  71. Real Bills Doctrine

  72. Real Estate Mortgage Investment Conduit - REMIC

  73. Real Option

  74. Recognition Lag

  75. Recoupling

  76. Recursive Competitive Equilibrium - RCE

  77. Refi Bubble

  78. Reflexivity

  79. Regression

  80. Regulatory Risk

  81. Reinvestment Risk

  82. Remittance Float

  83. Renewable Resource

  84. Rescaled Range Analysis

  85. Research Analyst

  86. Reservable Deposit

  87. Residual Dividend

  88. Response Lag

  89. Revealed Preference

  90. Reverse Survivorship Bias

  91. Ricardo-Barro Effect

  92. Ringfencing

  93. Ripple

  94. Risk Analysis

  95. Risk Assessment

  96. Risk Curve

  97. Risk Lover

  98. Risk Management

  99. Risk Neutral

  100. Risk Parity

Hot Definitions
  1. Benchmark Bond

    A bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds. Also referred to as "benchmark issue" or "bellwether issue".
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
  3. Oil Reserves

    An estimate of the amount of crude oil located in a particular economic region. Oil reserves must have the potential of being extracted under current technological constraints. For example, if oil pools are located at unattainable depths, they would not be considered part of the nation's reserves.
  4. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
  5. Aggregate Risk

    The exposure of a bank, financial institution, or any type of major investor to foreign exchange contracts - both spot and forward - from a single counterparty or client. Aggregate risk in forex may also be defined as the total exposure of an entity to changes or fluctuations in currency rates.
  6. Organic Growth

    The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic.
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