← All Glossary P/E Ratio (Price-to-Earnings) A valuation ratio comparing a company's current share price to its earnings per share, indicating how much investors pay for each dollar of earnings. Passive Management An investment strategy tracking a market index with minimal buying and selling, resulting in lower fees and turnover compared to active management. Payoff Diagram A graphical representation of an option strategy's profit or loss at expiration across different underlying asset prices, used for visualizing risk and reward. PEG Ratio The P/E ratio divided by the earnings growth rate, adjusting valuation for growth — a PEG under 1 may suggest an undervalued growth stock. PEG Ratio The P/E ratio divided by earnings growth rate, providing a valuation metric adjusted for expected growth. Pension A retirement plan providing guaranteed lifetime income based on salary and years of service, typically funded by employers in defined-benefit arrangements. PMI (Private Mortgage Insurance) Insurance protecting the lender if a borrower defaults on a conventional mortgage with a down payment less than 20%, typically paid monthly by the borrower. Portfolio A collection of financial investments — stocks, bonds, cash, real estate, and other assets — held by an individual or institution. Present Value (PV) The current worth of a future sum of money or cash flow discounted at a specified rate, accounting for the time value of money. Price-to-Book Ratio (P/B) A valuation ratio comparing a company's market price to its book value per share, used to identify potentially undervalued stocks. Primary Market The market where new securities are issued and sold directly by the issuer to investors, including IPOs and bond offerings. Prime Bank Investment A fraudulent investment scheme claiming access to secret high-yield trading programs from top global banks, often promising unrealistic returns with no risk — a common red flag scam. Principal The original amount of money invested or borrowed, excluding any interest or earnings accumulated over time. Promissory Note A debt instrument containing a written promise to pay a specified sum to a named party on demand or at a future date, often used in private lending and fraud schemes. Prospectus A formal legal document required by the SEC describing an investment offering's details, risks, financial data, and objectives for potential investors. Proxy Statement A document the SEC requires companies to provide shareholders before annual meetings, containing information on matters requiring a vote, executive compensation, and director nominees. Public Company A corporation whose shares are traded on a public stock exchange, subject to ongoing SEC disclosure requirements including annual and quarterly reports. Put Option A financial contract giving the buyer the right, but not the obligation, to sell a specified quantity of an underlying asset at a predetermined price within a timeframe.
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