What Does P Mean In Investment Term?

P is the NASDAQ stock symbol denoting that it is the company's premium class of preferred shares. P is also the indicator of the long term rate of inflation in the economy. The P* or the P star number is known to track the growth of the money supply measure or M2. If the P* exceeds P or the expected future prices, the Federal Reserve strives to tighten the interest rate and the bank credit, causing the economy to accelerate at a slower rate. When the P* is not as high as the P, the Federal reserve can relax its credit policies, making the money supply and bank credit grow at a quicker rate.  


The P* formula is:

P* = M2 • V* / Q*

Where, M2=an official calculation of the money supply (comprising of checks, savings, checkable deposits, and time deposits)
V= the velocity of M2, or the number of times that money turns over
Q =estimated value of Gross National Product in the future, assuming the economy grows at 2.5% a year.