Penny Shares
Shares with a very low market price, often bought by small investors because they are low – priced, a large number can be acquired, and even a small price rise represents substantial price appreciation, e.g., if a three – rupee share rises to five rupees, the capital, appreciation is 66.6%. Investors, who buy these, believe that a sufficiently low point has been reached and there is not much downward risk. On the other hand, if the company recovers, there is a lot to be gained.
Perfect Competition
A market structure in which the following five criteria are met:
1. All firms sell an identical product.
2. All firms are price takers.
3. All firms have a relatively small market share.
4. Buyers know the nature of the product being sold and the prices
charged by each firm.
5. The industry is characterized by freedom of entry and exit.
Sometimes referred to as “pure competition”.
Perpetual Annuity
A contractual agreement with a bank or an insurance company to which a person pays regular amounts over a period of time, or once in a lumpsum, to receive periodic sums in perpetuity. For example, monthly payments of a fixed instalment for a period of several years will qualify for payment of the same instalment every month . whereas payment of the same instalment every month for eleven years will assure payment of double the instalment amount every month in perpetuity. Perpetual annuity schemes offered by different insurance companies and banks are variations on the deferred annuity scheme
Portfolio
Combined holding of many kinds of financial securities – shares, debentures, government bonds, Unit Trust certificates, and other financial assets. . Reducing risk by diversification and maximization of gains are the primary objects of making a portfolio.
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Portfolio Manager
A professional who manages other people’s or institution’s investment portfolios with the objectives of profitability, growth, and risk minimization. He is expected to manage the investor’s assets prudently, and chooses particular investment avenues, such as cash equivalents, real estate, bonds, shares etc., appropriate for particular times, aiming at maximization of profit.
Positive
Carry If the interest paid on borrowed funds is less than the income from shares bought with them, there is a positive carry.