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Letter P

  • Participation certificates

    Participation certificate is a security that gives the unit holder the right to a corresponding share of the assets in the mutual fund and the right to share in the return on this asset.

  • Perfect markets

    The theory of financial markets is based on the assumption of perfect financial markets. In this abstract world the following assumptions apply: no taxes, no credit risk, no callable securities, no transaction costs, unlimited short selling is possible. In reality markets are not perfect. Despite this, the notion of perfect markets is a good starting point when studying financial markets.

  • Permanent debenture

    A permanent debenture pays the coupons for an unlimited period of time and its price equals the sum total of the present values of discounted debentures by way of yield until the due date.

  • Pool

    A pool is a term used to designate a joint fund of cash funds not differentiated in any way.

  • Portfolio mean yield

    The portfolio mean yield, or also the expected portfolio yield is a weighted average of expected yields of the individual component parts of the portfolio.

  • PRIBID

    One of the main indicators of loan markets in important financial centres is the reference interest rate, for which banks are willing to purchase (to borrow) deposits. For the Prague financial centre this rate is called PRIBID (Prague Interbank Bid Rate). They are determined from quotations of the reference bank in the market of interbank deposits including the algorithm for determining PRIBID and PRIBOR.

  • PRIBOR

    One of the main indicators of loan markets in important financial centres is the reference interest rate, for which banks are willing to sell (to lend) deposits. For the Prague financial centre this rate is called PRIBOR (Prague Interbank Offered Rate). They are determined from quotations of the reference bank in the market of interbank deposits including the algorithm for determining PRIBID and PRIBOR.

  • Price/earning ratio (P/E)

    The price/earning ratio (P/E) expresses the proportion of the market price of a share and of yield per share. It expresses how much investors are willing to pay for the yields at the respective public limited company.

  • Primary markets

    The primary market deals with the issues of new securities and their repayment. The creation of a new receivable means a transfer of cash from the investor to the borrower. A receivable is liquidated in such a way that the debtor repays cash (interest, principal) to the investor. This is not a secondary market, because in this special market the issuer offers something that does not zet exist and that arises only on condition that the issued security finds its first acquirer. Thus the issuer fully controls the operations in the primary market. When issuing a security, the issuer can often also influence who will become and who on the contrary cannot become its first acquirer.

  • Profit yield

    Profit yieldis calculated as a share in the profit after taxation and market capitalisation of the enterprise. Applicability of the profit yield is limited in the same way as it is with the dividend yield. Two companies may differ in the dates of their financial statements and the profits may relate to different periods. What is often published is the reciprocal value of profit yield designated as a P/E ratio, i.e. a ratio of momentary market price of a share of the enterprise to the profit of the enterprise per one share.

  • Put option

    The right to sell, to supply a share – the option is a security, which expresses the right of its holder to implement or not to implement a transaction at a certain date. Thus in the case of a put option it means to sell or to supply somebody with a share. The counterparty is obliged to implement the transaction if so desired by the other party.

  • PX – 50

    Prague Stock Exchange publishes 22 indices. The key index is the PX 50. It is determined by way of a standard calculation in agreement with the methodology of IFC (International Finance Corporation). The index measures the change in the market value of the representative portfolio of stock included into the base of the index. Each issue is due the weight proportionate to its market capitalisation. The base of the PX-50 index is composed of 50 issues. The base of the index does not include the issues of investment funds, because their rates reflect the price movements of basic issues. The issues included into the base of the index account for almost 88% of the volume of transactions with shares (not considering the investment funds).

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