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principal – (1) the total amount that was originally borrowed, or the portion of that amount that remains unpaid. Interests on a loan are based upon the unpaid or outstanding principal amount (2) an important company executive.

principal risk – the risk of losing not only profits, but also the amount invested (i.e. principal) due to bankruptcy or default.

put option – an agreement which gives the buyer, or holder, the right, but not the obligation to sell a certain quantity of financial assets at a previously specified price and date to the seller, or writer of the option.

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