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	PAID-IN CAPITAL Capital that is received from investors in exchange for stock, and which is equal to capital stock plus paid-in capital. Also may be referred to as contributed capital. PAID-IN SURPLUS The price paid by investors per share at issue minus the par value per share, multiplied by the number of shares issued. Also called additional paid-in capital. PAINT THE TAPE The illegal practice whereby traders purchase and sell a specific security between themselves, creating the illusion of high trading volume and large investor interest, which may entice naive investors to purchase the stock thus enabling the traders to profit. PAR The nominal dollar amount given to a security by the issuer. For an equity security, par is usually a very small amount that has little or no relationship to its market price, except for preferred stock, where par is used to calculate dividend payments. For a debt security, par is the amount repaid to the investor when the bond matures. PARI PASSU A legal term meaning that all securities within a specified series have an equal rank or claim on earnings and assets. It usually refers to equally ranking issues of a company's preferred shares. PASSIVE MANAGEMENT A money management strategy with an objective of matching the return and risk characteristics of an index, by mirroring its structure and composition. May also be called a passive portfolio strategy. PAST SERVICE PENSION ADJUSTED (PSPA) An employer may increase a member's pension through the granting of additional past service benefits to a member in a defined benefit plan. Plan members who obtain a PSPA will have their RRSP contribution limit reduced by the amount of this adjustment. PAYMENTS SYSTEM A series of clearing and settlement systems that enables cheques and other payment methods to be used in transactions throughout the economy. This network includes the cheques clearing system, Visa and MasterCard credit card systems, the networks of Interac, and the clearing systems for debt and equities and for mutual funds. The Canadian Payments Association, established in 1980 under the Canadian Payments Association Act operates a large number of clearing and settlement systems. Membership in the Canadian Payments Association is available to banks, trust companies, government savings institutions, credit unions, life insurance companies, securities dealers and money market mutual funds. P/E RATIO See Price/ Earnings ratio. PEG RATIO Stock's price/earnings ratio divided by its yearover-year earnings growth rate. This ratio is normally used in the comparison of higher growth companies to determine which has the most favourable market value. PENSION ADJUSTMENT (PA) The amount of contributions made or the value of benefits accrued to a member of an employersponsored retirement plan for a specific calendar year. The pension adjustment allows the individual to calculate the amount that may be contributed to an RRSP that would be in addition to contributions into a Registered Pension Plan. PENSION INCOME CREDIT A tax credit available on up to $1,000 of specific forms of pension income. The unused portion of the credit may be transferred to a partner. PENSION PLAN A formal arrangement through which the employer, and in most cases the employee, contribute to a fund, in order to provide the employee with a lifetime of income during retirement. PER CAPITA Means ‘per person’ within a relevant universe. Economic measures such as gross domestic product (GDP) provide much more information when they are measured in per capita format. If GDP increases but the population increases faster, average GDP per capita actually declines. POINT AND FIGURE CHART A chart that plots the movement of price only, without measuring the passage of time. POISON PILL A corporate provision to deter a hostile takeover offer. When triggered, a poison pill gives a corporation’s shareholders the opportunity to acquire additional shares at below market price, which in turn, increases the number of shares outstanding and makes a takeover much more costly to a potential suitor. Such plans are relatively new in Canada and are the subject of some debate regarding whom they are designed to protect. POOL A group of related financial instruments, such as mortgages, combined for resale to investors on a secondary market. May also be composed of stocks or bonds, providing instant diversification per unit owned. POP See Prompt Offering Qualification System. PORTFOLIO Represents all the securities that an investment company or an individual investor owns. PPI See Producer Price Index. PREFERRED STOCK Capital stock paying a specific dividend that is distributed before any dividends are paid to common stock holders, and which takes priority over common stock in the event of company insolvency. Preferred stock normally does not carry voting rights. PREMIUM The amount by which a preferred stock or debt security can sell above its par value. In the case of an issue of bonds or stocks, it is the amount the market price moves above the original price. It also refers to that portion of the redemption price of a bond or preferred share above face value, par value or market price. In the case of an option, it is the price paid by the buyer of an option contract to the seller. PRESERVATION OF CAPITAL A conservative investment strategy characterized by an emphasis on avoiding the risk of loss of capital. PRICE/EARNINGS RATIO (P/E RATIO) The cost an investor in a given stock must pay per dollar of current annual earnings. A very common measure of how pricey a stock is. The P/E ratio is also called an earnings multiple. Equal to a stock's capitalization divided by its after-tax earnings over a 12-month period, in the trailing period or in the current or forward time period. The ratio remains the same whether the calculation is done for the whole company or on a per share basis. PRICE-TO-BOOK RATIO Equal to a stock's capitalization divided by its book value. The ratio remains the same whether the calculation is done for the whole company or on a per share basis. PRICE STABILITY A level of price increases that is so small it protects the purchasing power of the currency, possibly no change at all. PRIMARY EARNINGS PER SHARE Includes common stock, stock options, and some convertible debt. In accordance with Financial Accounting Standards Board (FASB) rules, primary earnings per share are no longer reported. PRIMARY MARKET A market for new issues of securities. PRIME RATE Normally the interest rate chartered banks charge their most credit-worthy borrowers. PRINCIPAL The individual for whom a broker executes an order, or a dealer buying or selling for his or her own account. Alternatively, principal is an individual's capital or the face amount of a bond. PRIVATE PLACEMENT The underwriting of a security by an underwriter and its sale to one or more buyers, usually institutional, in large amounts. Done on a private, as opposed to public offering, basis. PRIVATE POOLED FUNDS Privately held units of a pooled fund usually held by an individual or small group of persons. PRIVATIZATION The sale of the ownership of Crown corporations owned by the government or public assets to the private sector. The process of privatization improves efficiency, enhances competition and creates investment opportunities. PROBATE The judicial process whereby the will of a deceased person is presented to a court and an executor/administrator is appointed to carry out the deceased’s instructions. PRODUCER PRICE INDEX (PPI) An inflationary indicator published by the Statistics Canada in Canada and the U.S. Bureau of Labor Statistics in the U.S. to determine wholesale price levels in the economy. PRODUCTIVITY OR TOTAL FACTOR PRODUCTIVITY The efficiency with which individuals as well as capital are combined in the output of the economy. Productivity gains usually lead to improvements in the standard of living, due to the fact that as labour and capital produce more, they in turn generate greater income for the population. Often expressed on a per unit of production basis. PROFIT AND LOSS STATEMENT This is the same as an earnings report or income statement. PRO-FORMA Financial statements constructed to reflect specific assumptions or conditions, on an historical or future basis. An example of this would include an acquisition, reflecting new share dilution impact, etc. It is often used with both balance sheets and income statements. PROGRAM TRADING An automatically executed, computer driven program for trading securities, which usually takes place in large volumes of a basket of stocks. PROSPECTUS A document that is required by securities laws to be filed and made available to potential investors in the context of a securities offering to the public. It is imperative the prospectus contain full, clear and plain disclosure of any and all material facts about both the securities and the issuer. PROXY A written authorization given by a shareholder to another individual, usually the company's management, in order to cast his/her vote at a shareholder meeting or at some other point in time. PROXY STATEMENT A document that the regulators require a company to send to their shareholders that give all material facts with regard to issues on which the shareholders will vote. PROXY VOTE The fundamental principle for professional money management, whereby "Those with responsibility to invest money for others should act with prudence, discretion, intelligence, and regard for the safety of capital as well as income." PSPA See Past Service Pension Adjusted. PUBLIC FLOAT OR PUBLICLY FLOATED STOCK The public float of a company's stock refers to shares that are listed and available for trading on a recognized stock exchange in Canada and that are not owned or controlled by individuals who have a significant interest in any class of voting shares. PUBLICLY TRADED A company that has issued securities through a public offering that are now traded on the open market. Also called a public company or publicly held company and is the opposite of a private company. PUMP AND DUMP An illegal procedure of artificially and temporarily elevating the price of a security or securities, either through the initiation of a rumour or through trading a security by a block trade at an artificially raised price, in an effort to create an artificial demand for the stock, and then selling the same securities purchased into that elevated price level. PURCHASING POWER PARITY The economic theory that in the long run, an identical basket of products and services in different countries should cost the same. This is based on the theory that exchange rates will adjust to eliminate any arbitrage opportunity of buying a product or service in one country and selling it in another. The theory, however, has it’s limitations in that it ignores the effects of transportation costs and tariffs. May also be used to compare similar ‘baskets’ between time periods. PUT (OR PUT OPTION) An option contract that gives the holder the right, but not the obligation, to sell a certain quantity of an underlying security to the writer of the option, at a specified price (strike price) up to a specified point in time (expiration date).