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l-text">Last updated: 22 Feb, 2017  
SME Glossary
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Glossary of Export Import Trade Terms Starting with - P
Words   Description
Packing List A list showing the number and kinds of items being shipped, as well as other information needed for transportation purposes.
Parallel Loan A loan arrangement in which a company borrows in its home currency and then trades this debt for the foreign currency debt of a foreign counterpart.
Partnership Form of business organization in which two or more co-owners form a business. In a general partnership each partner is liable for the debts of the partnership. Limited partnership permits some partners to have limited liability.
Passive Income In the U.S. tax code, income (such as investment income) that does not come from active participation in a business.
Patent A government grant that gives inventors exclusive right of making, using, or selling the invention.
Payback Period Rule An investment decision rule which states that all investment projects that have payback periods equal to or less than a particular cutoff period are accepted, and all those that pay off in more than the particular cutoff period are rejected.
Payoff Profile A graph with the value of an underlying asset on the x-axis and the value of a position taken to hedge against risk exposure on the y-axis. Also used with changes in value. (Contrast with risk profile.)
Payout Ratio Proportion of net income paid out in cash dividends.
Pegged Exchange Rate System The International Monetary Fund’s name for a fixed exchange rate system.
Pension Liabilities A recognition of future liabilities resulting from pension commitments made by the corporation. Accounting for pension liabilities varies widely by country.
Perfect Market Assumptions A set of assumptions under which the law of one price holds. These assumptions include frictionless markets, rational investors, and equal access to market prices and information.
Perils of the Sea A marine insurance term used to designate heavy weather, stranding, lightning, collision, and seawater damage.
Periodic Call Auction A trading system in which stocks are auctioned at intervals throughout the day.
Perpetuity A constant stream of cash flows without end. A British consol is an example.
Phytosanitary Inspection Certificate A certificate, issued by the Indian Government Department of Agriculture to satisfy import regulations for foreign countries, indicating that a India shipment has been inspected and is free from harmful pests and plant diseases.
Phytosanitary Measure A piece of legislation, regulation, or procedure with the purpose of preventing the introduction or spread of pests. Phytosanitary procedures often include the performance of inspections, tests, surveillance, or other treatments.
Points Quote An abbreviated form of the outright quote used by traders in the interbank market.
Political Risk In export financing the risk of loss due to such causes as currency, inconvertibility, government action preventing entry of goods, expropriation or confiscation, war, etc.
Portfolio Combined holding of more than one stock, bond, real estate asset, or other asset by an investor.
Postal Parcel Receipt The postal authorities' signed acknowledgment of delivery to receiver of a shipment made by parcel post.
Power Distance The extent to which a society accepts hierarchical differences.
Predatory Pricing It is a form of price discrimination that requires selling below cost with the intention of destroying competition. However, predatory pricing is against law.
Premium If a bond is selling above its face value, it is said to sell at a premium.
Present Value The value of a future cash stream discounted at the appropriate market interest rate.
Present Value Factor Factor used to calculate an estimate of the present value of an amount to be received in a future period.
Price Elasticity of Demand The sensitivity of quantity sold to a percentage change in price; -%changeQ/%changeP.
Price Uncertainty Uncertainty regarding the future price of an asset.
Private Export Funding Corporation(PEFCO) Lends to foreign buyers to finance exports from U.S.
Private Placement A securities issue privately placed with a small group of investors rather than through a public offering.
Privatization A process whereby publicly owned enterprises are sold to private investors. (Contrast with nationalization.)
Privileged Foreign (PF) Foreign merchandise or non-tax paid domestic merchandise upon which the duty and applicable taxes have been determined at the time this status is approved.
Product Cycle Theory Product cycle theory views the products of the successful firm as evolving through four stages: (1) infancy, (2) growth, (3) maturity, and (4) decline.
Product Life Cycle (PLC) The complete life of a product, from early planning through sales build-up, maximum sales, declining sales, and withdrawal of the product. Product life cycle lengths and types can vary depending on the type of product, the frequency of replacement.
Production Possibilities Schedule The maximum amount of goods (for example, food and clothing) that a country is able to produce given its labor supply.
Production Sharing Production sharing occurs when a producer chooses to make a product in stages - and in different countries - so that the firm can employ the lowest-cost resources in the production process.
Profitability Index A method used to evaluate projects. It is the ratio of the present value of expected future cash flows after initial investment divided by the amount of the initial investment.
Proforma Invoice An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent their value and important specifications.
Progressive Taxation A convex tax schedule that results in a higher effective tax rate on high income levels than on low-income levels.
Project Financing A way to raise nonrecourse financing for a specific project characterized by the following: (1) the project is a separate legal entity and relies heavily on debt financing and (2) the debt is contractually linked to the cash flow generated by the project.
Promissory Note Financial document in which the buyer agrees to make payment to the seller at a specified time.
Proprietary Knowledge Private or exclusive knowledge that cannot be legally used or duplicated by competitors.
Prospectus A brochure that describes a mutual fund’s investment objectives, strategies, and position limits.
Protectionism Protection of local industries through tariffs, quotas, and regulations that discriminate against foreign businesses.
Psychic Distance The similarities or lack thereof between country markets. This concept takes into account geographic distance, cultural similarities, linguistic aspects, legal systems and methods of conducting business.
Public Relations A variety of programs designed to promote and/or protect a company's image or its individual products.
Public Securities Offering A securities issue placed with the public through an investment or commercial bank.
Purchasing Agent An agent who purchases goods in his or her own country on behalf of foreign importers such as government agencies and large private concerns.
Purchasing Power Parity (PPP) The principle that equivalent assets sell for the same price. Purchasing power parity is a measurement of a currency's value based on the buying power within its own domestic economy.
Pure Discount Bond Bonds that pay no coupons and only pay back the face value at maturity. Also referred to as "bullets" and "zeros."
Put Option The right to sell the underlying asset at a specified price and on a specified date.
Put-Call Parity The relation of the value of a long call, a short put, the exercise price, and the forward price at expiration; CallTd/f - PutTd/f + Kd/f = FTd/f.
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