GLOSSARY Terms related to the Federal Reserve, banking and economics   A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |   par value The full face value of a security.   payments system   permissible nonbank activities   points In reference to a loan, points consist of a lump sum payment made by the borrower at the outset of the loan period. Generally, each point equals one percent of the loan amount. See also seller's points.   predatory lending Targeting loans to elderly, low-income and other people to take advantage of their financial status or lack of financial knowledge.   premium The amount by which the auction price of a bill, note or bond is higher than its face value.   pretax A person's salary before state and federal income taxes are calculated.   prime rate The lowest interest rate on bank loans, offered to preferred borrowers.   principal The unpaid balance on a loan, not including interest; the amount of money invested.   promissory note A written promise on a financial instrument to repay the money plus interest.   purchasing power parity theory The exchange rate between any two currencies adjusts to reflect changes in the price levels within the two countries.   purpose credit Credit used for the purpose of buying, carrying or trading in securities.