P

1 P/E Effect

Fundamental analysis calls on much wider range information to create portfolios than doe’s technical analysis. One of the criteria is to use the price/earnings (P/E) ratio information to formulate portfolios. It has been found that portfolios of low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks.

2 P/E Ratio

A firm’s stock price per share divided by earnings per share.

3 PAC

Planned amortization class such as collateralized mortgage option (CMO) — A security that is retired according to a planned amortization schedule, while payments to other classes of securities are slowed or accelerated. The objective is to ensure that PACs exhibit highly predictable maturities and cash flows.

4 Package

A derivative that is a portfolio of standard calls and puts, possibly combined with a position in forward contracts and the asset itself.

5 Pac-Man Strategy

In a pac-man strategy, the target firm tries to turn the tables and take over the hostile...