Category: Financial Terms

Qualified Appraisal: IRS Rules, When It’s Needed, and Why It Matters What is a qualified appraisal? A qualified appraisal is a written valuation of donated property that meets Internal Revenue Service (IRS) standards and is prepared by a qualified appraiser. It establishes the fair market value of property for tax-deduction purposes and helps substantiate non-cash…

Qualified Annuity A qualified annuity is a retirement account funded with pre-tax dollars. Contributions reduce taxable income in the year they’re made, and both contributions and earnings grow tax-deferred. Taxes are owed when the owner takes distributions, which are taxed as ordinary income. Key takeaways Funded with pre-tax dollars; contributions typically deductible or made within…

Qualified Adoption Expenses (QAE) What QAE Are Qualified adoption expenses (QAE) are reasonable and necessary costs paid to adopt an eligible child (under age 18) or a person who is physically or mentally incapable of self-care. The Internal Revenue Service (IRS) allows eligible taxpayers to use QAE to claim the adoption tax credit or exclusion,…

Qualifying Ratios: What They Are and How They Work Qualifying ratios are financial metrics lenders use to evaluate a borrower’s ability to repay a loan by comparing debt obligations to income. These ratios help determine whether an applicant will be approved and, if approved, the terms and how much they can borrow. Key ratios Debt-to-Income…

Quadruple Witching: What It Is and How It Affects Markets Key takeaways Quadruple witching refers to the simultaneous expiration of four derivative contract types—stock index futures, stock index options, stock options, and single-stock futures—on the third Friday of March, June, September, and December. Since single-stock futures no longer trade in the U.S., these days are…

Quadrix Quadrix is a proprietary stock-rating system created and maintained by Horizon Publishing Company and developed by Rich Moroney, Chief Investment Officer at Horizon Investment Services. Launched in 2000, Quadrix produces composite scores for individual stocks using a broad set of metrics to help investors narrow a large universe of equities for further analysis. How…

Qtum: What it is and how it works Key takeaways Qtum is a blockchain platform that combines Bitcoin’s UTXO transaction model with Ethereum-style smart contracts. It uses a proof-of-stake (PoS) consensus mechanism to create blocks and secure the network, reducing energy consumption compared with proof-of-work (PoW) systems. Qtum is designed for business-focused decentralized applications (dApps)…

QQQQ (now QQQ) — Overview What QQQQ was (and what QQQ is) QQQQ was the original ticker for the Invesco QQQ Trust, an exchange-traded fund (ETF) that launched in March 1999 to track the Nasdaq‑100 Index. In March 2011 the ticker was shortened to QQQ. The fund provides concentrated exposure to the largest non‑financial companies…

Qatari Riyal (QAR) Overview The Qatari riyal (currency code QAR, abbreviation QR) is the official currency of the State of Qatar. One riyal equals 100 dirhams. All banknotes and coins are issued by the Qatar Central Bank, which manages monetary stability and maintains regulatory control over the currency. History The Qatari riyal was introduced in…

Qatar Investment Authority (QIA) What is the QIA? The Qatar Investment Authority (QIA) is Qatar’s sovereign wealth fund, headquartered in Doha. Established in 2005, it manages state reserves with the objective of preserving and growing national wealth to support Qatar’s long-term economic development. The fund is government-owned and reports to the Supreme Council for Economic…

Q Ratio (Tobin’s Q) What it is Tobin’s Q (the Q ratio) compares a firm’s market valuation with the replacement cost of its assets. It helps indicate whether a company — or an entire market — appears overvalued or undervalued relative to what it would cost to rebuild the business. Q > 1: market value…

Understanding “Q” in Nasdaq Ticker Symbols On the Nasdaq exchange, a trailing letter appended to a company’s four-letter ticker has historically been used to convey special status information. The letter “Q” was one such suffix, used to indicate that a company had filed for bankruptcy and was undergoing bankruptcy proceedings. How Nasdaq ticker suffixes work…

Put Option: What It Is, How It Works, and How to Trade What is a put option? A put option is a derivative contract that gives the holder the right, but not the obligation, to sell an underlying asset (stock, ETF, commodity, bond, index, currency, etc.) at a specified price (the strike) on or before…

Put-Call Parity Key takeaways Put-call parity describes a precise price relationship between European call and put options that share the same underlying asset, strike price, and expiration. The standard parity equation is C + PV(X) = P + S, where PV(X) is the present value of the strike discounted at the risk-free rate. Deviations from…

What is a put option? A put option is a financial contract that gives its buyer the right, but not the obligation, to sell a specific quantity of an underlying asset (for example, 100 shares) at a predetermined price (the strike price) on or before a specified expiration date. The buyer pays a premium for…

Pushdown Accounting: Definition, How It Works, and Example Key takeaways Pushdown accounting records an acquired company’s assets and liabilities at the purchaser’s acquisition cost rather than the target’s historical cost. The purchase price becomes the acquired company’s new book value; any resulting gains, losses, or goodwill are reflected on the acquired entity’s financials. Under U.S….

What is pure risk? Pure risk (also called absolute risk) refers to situations that can result only in loss or no loss—there is no opportunity for gain. These are typically events beyond human control, such as natural disasters, fire, theft, or death. Key characteristics Two possible outcomes: complete loss or no loss. No potential for…

What Is a Pure Play? A pure play is a company that focuses primarily on a single product, service, or industry niche. Investors favor pure plays when they want concentrated exposure to a specific market segment because these companies are typically easier to analyze and compare. Pure plays contrast with conglomerates or multi-divisional firms, which…

Purchasing Power Purchasing power describes how much goods and services a unit of currency can buy. When prices rise (inflation), purchasing power falls; when prices fall (deflation), purchasing power rises. Maintaining purchasing power is a central goal of economic policy because it affects living standards, investment returns, and the broader health of an economy. What…

Purchase Price in Finance: Effect on Capital Gains What the purchase price is The purchase price is the amount an investor pays to acquire an investment. It becomes the investor’s cost basis for calculating gains or losses when the investment is later sold. The purchase price typically includes commissions or sales charges. Calculating cost basis…

Purchase-Money Mortgage: Definition and Overview A purchase-money mortgage (also called seller financing or owner financing) is a loan the seller provides to the buyer as part of a property sale. Instead of the buyer obtaining a loan from a bank, the buyer pays a down payment to the seller and issues a financing instrument (mortgage,…

Purchase Money Security Interest (PMSI) A purchase money security interest (PMSI) is a special type of secured interest that gives a lender priority over other creditors in the goods it financed. If the borrower defaults, the PMSI holder can repossess the financed goods or claim their cash value ahead of competing secured parties—provided the statutory…

Purchasing Managers’ Index (PMI) The PMI is a monthly diffusion index that signals expansion or contraction in business activity. Readings range from 0 to 100: above 50 = expansion, below 50 = contraction, 50 = no change. Manufacturing PMI weights new orders, production, employment, supplier deliveries, and inventories equally. The index is used by corporate…

Purchase APR: Definition, how it works, and how to avoid interest Key takeaways * Purchase APR is the annual interest rate a card issuer charges on purchases you carry a balance on. * Credit card APRs are expressed annually but applied monthly (monthly rate ≈ APR ÷ 12). * Pay your statement in full by…

Pump Priming Pump priming is government or central-bank action taken to stimulate spending and revive an economy—typically during or after a recession. The term comes from the literal practice of priming a pump (adding water) so it can operate; economically, it means injecting funds or easing conditions so private-sector activity resumes. Key takeaways Pump priming…

Understanding Pump-and-Dump Schemes What is a pump-and-dump? A pump-and-dump is a fraudulent scheme that artificially inflates the price of a security or asset through false, misleading, or exaggerated statements (the “pump”) and then sells off the perpetrators’ holdings at the elevated price (the “dump”). When the insiders sell, the price collapses, leaving other buyers with…

Pullback: What It Means in Trading, With Examples Key takeaways A pullback is a short-lived decline or pause within an overall uptrend. It typically lasts a few trading sessions and often offers a buying opportunity. Traders watch technical support (moving averages, pivot points, Fibonacci levels) and momentum indicators to decide whether the decline will resume…

Public-Private Partnerships Public-private partnerships (PPPs) are contractual collaborations between a government agency and a private-sector company to finance, build, and operate public infrastructure or services. They are commonly used for large, capital-intensive projects—such as highways, airports, water systems, hospitals, schools, and prisons—where private finance, technical expertise, or operational capacity can help deliver projects more quickly…

Public Limited Company (PLC) Key takeaways * A Public Limited Company (PLC) is a UK company that can offer shares to the public and may be listed on a stock exchange. * A PLC must include “PLC” or “public limited company” in its legal name and meet statutory requirements (including minimum share capital). * Shareholders…

Public Goods A public good is a commodity or service available to all members of a society without reducing its availability to others. Public goods are typically provided or financed by governments because they are difficult for private markets to supply efficiently. Core characteristics Non-rivalrous: One person’s use does not diminish the ability of others…

Public Company Accounting Oversight Board (PCAOB) Overview The Public Company Accounting Oversight Board (PCAOB) is a nonprofit organization that regulates the audits of publicly traded companies, as well as SEC-registered brokers and dealers. Its core mission is to protect investors and the public interest by promoting accurate, reliable audit reports and minimizing audit risk. History…

Public Company What is a publicly traded company? A publicly traded (or public) company is a corporation whose ownership shares are available for purchase and sale by the general public on stock exchanges or over-the-counter (OTC) markets. Public companies must disclose financial and business information regularly and comply with securities regulations. How it works Initial…

What is a proxy vote? A proxy vote is a ballot cast by one person or entity on behalf of a shareholder who cannot or chooses not to attend a shareholder meeting. Shareholders receive proxy materials—typically a proxy statement and a proxy card—that explain the issues to be voted on (for example, board elections, mergers…

Proxy Statement: What It Is and Why It Matters Key takeaways * A proxy statement is a required SEC filing that provides shareholders with information needed to vote at annual or special meetings. * Public companies file the definitive proxy statement as Form DEF 14A and make it available via the SEC’s EDGAR database. *…

Proxy Fight A proxy fight (or proxy battle) occurs when a group of shareholders tries to gain control of corporate voting outcomes by collecting enough proxy votes to replace management or a board of directors, or to influence major corporate decisions such as mergers or asset sales. Proxy fights are a common tool in hostile…