Paid-Up Policy - After your insurance policy has been in force for a period of time defined in the policy, you may be entitled to non-forfeiture benefits. If you have one of those policies and you prematurely stop paying the required premiums, your policy becomes paid-up. You don't pay any more premiums, but the benefits you receive under the policy will be determined based on the amount of premiums you have already paid, not on the level of benefits you originally purchased.

Paper profit (loss) - An unrealized profit or loss on a security still held. Paper profits and losses become realized only when the security is sold.

Par - In the case of a common share, par means a dollar amount assigned to the share by the company's charter. Par value may also be used to compute the dollar amount of common shares on the balance sheet. Par value has little relationship to the market value of common stock. Many companies issue no-par stock but give a stated per share value on the balance sheet. In the case of preferred stocks it signifies the dollar value upon which dividends are figured. With bonds, par value is the face amount, usually $1,000.

Participating preferred - A preferred stock that is entitled to its stated dividend and to additional dividends on a specified basis upon payment of dividends on the common stock.

Partnership Policy - A type of long-term care insurance policy that allows you to protect (keep) some of your assets if you apply for Medicaid after using your policy's benefits. Only a few states have these policies.

Passed dividend - Omission of a regular or scheduled dividend.

Passive Income - Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved. As with non-passive income, passive income is usually taxable; however it is often treated differently by the Internal Revenue Service (IRS).

Penny stocks - Low-priced issues, often highly speculative, selling at less than $1 a share. Frequently used as a term of disparagement, although some penny stocks have developed into investment-caliber issues.

Period-Certain Annuity - An annuity that provides guaranteed payments to an annuitant for a specified period of time.

Physical Option - An option that is based on a physical asset. Physical options give the owner the right to buy or sell physical assets at a predetermined price and date. They are called "physical" because they are based on assets such as currencies, Treasury debts and commodities, rather than stocks, futures and indexes.

Plan Administrator - The person who is identified in the plan document as having responsibility for running the plan. It could be the employer, a committee of employees, a company executive, or someone hired for that purpose.

Plan Document - A written instrument under which the plan is established and operated.

Plan Fiduciary - Anyone who exercises discretionary authority or discretionary control over management or administration of the plan, exercises any authority or control over management or disposition of plan assets, or gives investment advice for a fee or other compensation with respect to assets of the plan.

Plan Trustee - Someone who has the exclusive authority and discretion to manage and control the assets of the plan. The trustee can be subject to the direction of a named fiduciary and the named fiduciary can appoint one or more investment managers for the plan’s assets.

Plan Year - A 12-month period designated by a retirement plan for calculating vesting and distribution, among other things. The plan year can be the calendar year or an alternative period, e.g., July 1 to June 30.

Point - In the case of shares of stock, a point means $1. If ABC shares rise 3 points, each share has risen $3. In the case of bonds a point means $10, since a bond is quoted as a percentage of $1,000. A bond that rises 3 points gains 3% in $1,000, or $30 in value. An advance from 87 to 90 would mean an advance in dollar value from $870 to $900. In the case of market averages, the word point means merely that and no more. If, for example, the NYSE Composite Index rises from 90.25 to 91.25, it has risen a point. A point in this index, however, is not equivalent to $1.

Portfolio - Holdings of securities by an individual or institution. A portfolio may contain bonds, preferred stocks, common stocks and other securities.

Pour-over - A provision in a person's will stating that certain assets are to be transferred (poured over) to a trust upon the death of that person.

Power of Attorney - A written legal document in which one person (the principal) appoints another person to manage the principal's financial affairs. Even though the intent is that the power of attorney will not take effect until the principal becomes unable to handle his or her own affairs, it actually takes effect on the date it is signed, unless otherwise specified. And, unless otherwise specified, the durable financial power of attorney applies only to assets owned directly by the principal, and not to any assets transferred into a trust by the principal. Unlike an ordinary power of attorney, a durable power of attorney remains in effect even after the principal can no longer manage his or her own affairs.

Power of Attorney for Health Care - A written legal document in which one person (the principal) appoints another person to make health care decisions on behalf of the principal in the event the principal becomes incapacitated (the document defines incapacitation). This instrument can contain instructions about specific medical treatment that should be applied or withheld. While its purpose remains essentially the same from state-to-state, the name of this document can vary; for example, in Florida it is called an Appointment of Health Care Surrogate.

Preferred stock - A class of stock with a claim on the company's earnings before payment may be made on the common stock and usually entitled to priority over common stock if the company liquidates. Usually entitled to dividends at a specified rate - when declared by the board of directors and before payment of a dividend on the common stock - depending upon the terms of the issue.

Premium - The amount by which a bond or preferred stock may sell above its par value. May refer, also, to redemption price of a bond or preferred stock if it is higher than face value.

Price-to-Earnings Ratio - A popular way to compare stocks selling at various price levels. The P/E ratio is the price of a share of stock divided by earnings per share for a 12-month period. For example, a stock selling for $50 a share and earning $5 a share is said to be selling at a price-to-earnings ratio of 10.

Primary distribution - Also called primary or initial public offering. The original sale of a company's securities.

Prime rate - The lowest interest rate charged by commercial banks to their most credit-worthy customers; other interest rates, such as personal, automobile, commercial and financing loans are often pegged to the prime.

Principal - The person for whom a broker executes an order, or dealers buying or selling for their own accounts. The term "principal" may also refer to a person's capital or to the face amount of a bond.

Probate - The process by which an executor, who files a deceased person's will with the local probate court, or a court-appointed administrator if there is no will, takes an inventory and gets appraisals of the deceased's property, pays all legal debts, and eventually distributes the remaining assets and property to heirs or beneficiaries.

Profit-Sharing Plan - A profit-sharing plan allows the employer each year to determine how much to contribute to the plan (out of profits or otherwise) in cash or employer stock. The plan contains a formula for allocating the annual contribution among the participants.

Profit-taking - Selling stock that has appreciated in value since purchase, in order to realize the profit. The term is often used to explain a downturn in the market following a period of rising prices.

Prospectus - The official selling circular that must be given to purchasers of new securities registered with the Securities and Exchange Commission. It highlights the much longer Registration Statement file with the Commission.

Proxy - Written authorization given by a shareholder to someone else to represent him or her and vote his or her shares at a shareholders meeting.

Proxy statement - Information given to stockholders in conjunction with the solicitation of proxies.

Prudent Man Rule - An investment standard. In some states, the law requires that a fiduciary, such as a trustee, may invest the fund's money only in a list of securities designated by the state - the so-called legal list. In other states, the trustee may invest in a security if it is one that would be bought by a prudent person of discretion and intelligence, who is seeking a reasonable income and preservation of capital.