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Passive management

An investing strategy that generally involves a portfolio of securities that tracks the performance of a benchmark or investment model. The holdings of a fund that is passively managed are only adjusted if there is a change in the benchmark or investment model.

Payday loan

A small, short-term, high-rate loan that you can get if you have pay coming from work. A very costly way to borrow money. Also called a cash advance loan.

Payroll savings program

A way to have money taken automatically from your pay and put into a special savings account. The idea is that if you don't see the money, you won't miss it - or spend it.

Penny stock

Low-priced stocks that typically sell for less than one dollar per share. Usually offered by companies with good growth prospects but limited assets and a short operating history.


A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.

Pension fund

An account that holds all the money that an employer and employees contribute for pensions. It also holds interest and investment earnings. The fund pays out pension benefits to plan members when they retire.

Performance ratios

Ratio analysis tools that investment analysts use to evaluate various aspects of a company's operating and financial performance such as its profitability or solvency.

Personal banker

Employees of banks and trust companies. They're trained to sell investments such as GICs and savings bonds. They may also be registered to sell mutual funds.


A type of fraud where a stranger poses as a trustworthy person or business to get your private information, such as passwords or credit card numbers. It is often done using email or an instant message.

Political risk

The risk of loss when there are changes to the political leaders or policies in a country. They may lead to changes in inflation and interest rates, which in turn may affect stock prices.

Pooled fund

Investments where funds from many investors, typically high net worth and institutional investors, are combined and are invested and managed by an investment manager. They are typically used to reduce trading costs.


All the different investments that an individual or organization holds. May include stocks, bonds and mutual funds.

Portfolio manager

An investment professional who manages your investment portfolio. For example, they buy, sell and monitor investments that fit their clients' goals and tolerance for risk.

Power of attorney

A written authorization for another person to make financial and health care decisions for you if you are not able. Rules vary from province to province.

Preferred share

A type of stock that gives you the right to receive regular dividends and part of the company's assets if it shuts down, as well as the right to sell shares at set times or convert your shares to common shares. Usually does not give you voting rights.

Present value

The current value of money you will receive sometime in the future. Calculated by reducing the future amount at an appropriate compound interest rate.

Price-to-book value ratio (P/B)

A ratio that compares the value the market puts on a company to the value the company has stated in its financial books. It's calculated by dividing the current price per share by the book value per share. The book value is the current equity of a company, as listed in its annual report.

Price-to-earnings ratio (P/E)

A ratio that gives investors an idea of how much they are paying for a company's earnings , specifically whether a stock's price is high, or low, compared to its earnings. For example, if a company's stock currently sells for $50 a share and its earnings per share are $5, it would have a price-to-earnings ratio of $50 divided by 5, to equal 10.

Price/earnings-to-growth ratio (PEG)

A ratio that indicates whether a stock may or may not be a good value. It's calculated by dividing the P/E ratio by the company's projected growth in earnings. The lower the number, the less you have to pay to get in on the company's expected future earnings growth.

Primary market

The market where securities are offered to investors for the first time. The money from the sale of the securities goes directly to the company. For example, buying a company's stocks from a company it hires to sell them (the underwriter).


The total amount of money that you invest, or the total amount of money you owe on a debt.

Principal protected note (PPN)

A fixed-income security that guarantees a minimum return of your initial investment after 5 to 10 years, and a possible gain. It does not guarantee that you will make money.

Private issuer

A company with no more than 50 security holders (not including employees or former employees). It does not sell its securities to the public.

Private issuer exemption

An exemption that permits a private issuer to sell its securities to certain individuals (such as a founder, director, officer or accredited investor) without having to file a prospectus and without engaging the services of a registered dealer.

Pro-forma earnings

An informal way to show investors how certain changes in a company may affect its results. Shows results after giving effect to certain assumptions, projections or commitments not yet completed.

Pro-forma financial statements

Reports that help investors understand the affect of an actual or possible change in a company. Shows the effect to company results if the assumption had actually taken place.


Fees to settle your estate after your death. The probate process includes reviewing your will to ensure it's valid. Also includes paying any debts and giving your money and property to the beneficiaries you have named in your will.


A financial gain for a person or company. Equals the money left over after you subtract your costs from the money you made.

Projected cash reserve

The money that a company expects to have at some future date to fund its operations.

Projected growth

The amount that a company expects its earnings to grow by some future date.


A legal document that sets out the full, true and plain facts you need to know about a security. Contains information about the company or mutual fund selling the security, its management, products or services, plans and business risks.

Prospectus exemption

An exemption that allows a company lawfully to sell securities without providing a prospectus.

Put option

An agreement that gives you the right to sell a stock, bond or other investment at a set price within a set time period. Also simply called a "put."

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