Definitions Starting with "M"

M Banking

M banking is the use of a smartphone or other cellular phone to conduct tasks such as monitoring account balances, transferring funds between accounts, bill payment and locating an ATM while away from a computer. M banking typically operates across all major U. Read more

Ma and Pa Shop

A ma and pa shop is a family-owned independent business. For example, franchises and big-box stores such as Target and Wal-Mart are not ma and pa shops. Read more

Macaroni Defense

Companies adopt a macaroni defense by issuing bonds that are redeemable at a high price in the event of a change in control. For example, let's assume that Company ABC wants to buy Company XYZ. Read more

Macaulay Duration

The Macaulay duration (named after Frederick Macaulay, an economist who developed the concept in 1938) is a measure of a bond's sensitivity to interest rate changes. Technically, duration is the weighed average number of years the investor must hold a bond until the present value of the bond’s cash flows equals the amount paid for the bond. Read more

Macro Accounting

Macro accounting, also called national accounting, is a method of calculating the economic activity of a country or region. In the United States, federal government agencies typically use macro accounting to calculate employment rates, inflation rates and many other statistics that indicate how the country's economy is faring. Read more

Macro Environment

A macro environment is a wide, broad set of economic conditions rather than the conditions in a specific sector or industry within an economy. The macro environment in the American economy, for example, revolves largely around the business cycle and includes trends in inflation, employment, gross domestic output or other factors that measure and encompass conditions throughout the whole economy. Read more

Macro Risk

Macro risk is the risk that the political activity in a country will affect the operations of foreign companies that do business in that country. For example, let's say the government of the country of Cyprus is facing a fiscal crisis and decides to seize a portion of all the money in bank accounts held in the country. Read more

Macroeconomic Factor

A macroeconomic factor is a financial characteristic, trend, or condition that applies to a broad aspect of an economy rather than a certain population. 

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Macroeconomics

Macroeconomics involves the study of aggregate factors such as employment, inflation, and gross domestic product, and evaluating how they influence the economy as a whole. The Great Depression and its resulting high unemployment rate greatly influenced the development of macroeconomics. Read more

Macromarketing

Macromarketing describes how marketing affects an entire society's demand for goods and services. In many first-world countries, marketing is not just another occupation. Read more

Macroprudential Analysis

Macroprudential analysis is analysis of the stability of an economy's financial institutions. In the United States, stress tests are the most common example of macroprudential analysis. Read more

Mad Hatter

In the business world, a mad hatter is a leader, usually a CEO, who makes unusual or impulsive decisions. In Lewis Carroll's book Alice's Adventures in Wonderland, the main character, Alice, meets the Mad Hatter. Read more

Made To Order (MTO)

Made to Order (MTO) is a production and inventory strategy in which companies manufacture products or provide services according to each customer's specifications rather than according to a homogenous specification. Let's say Company XYZ produces widgets. Read more

Made to Stock (MTS)

Made to Stock (MTS) is a production and inventory strategy in which companies manufacture products or provide services according to their forecast of customer demand. Let's say Company XYZ produces widgets, which are popular Christmas presents. Read more

Magna Cum Laude

Magna cum laude is Latin for with great honor. Let's say John Doe is about to graduate college. Read more

Magnet Employer

A magnet employer is an employer to which people are attracted or especially interested in working for. For example, let's say Company XYZ is located in Anywhere, USA. Read more

Main Home

In the tax world, a main home is where a taxpayer has lived for most of the tax year or is the only home the taxpayer owns. For example, let's assume John Doe buys a house in Austin, Texas, for $150,000. Read more

Main Street

Main Street refers collectively to members of the general population who invest in the capital markets. Individuals and businesses that do not work for financial and investment companies are considered part of Main Street. Read more

Maintenance Bond

A maintenance bond is a surety bond for construction projects. For example, let's say Company XYZ is a contracting company hired to build the new ABC office building. Read more

Maintenance Expenses

Maintenance expenses are the costs associated with keeping an asset in working order and good condition. For example, let's assume that Company XYZ is a restaurant chain. Read more

Maintenance Margin

A maintenance margin is a limit after which a brokerage firm can make a margin call. A margin account is a loan from a brokerage firm. Read more

Major Downtrend

A major downtrend, or bear market, is when financial assets and markets -- as with the broader economy -- fall steadily for an extended period of time. A major downtrend is when each successive decline of the primary trend carries the market to lower lows and lower highs, lasting from several months to several years. Read more

Major Pairs

Major pairs are the four pairs of currencies that are most commonly traded in the foreign exchange markets. The major pairs are Euro/U. Read more

Major Uptrend

A major uptrend, or bull market, is when financial assets and markets -- as with the broader economy -- move in an upward direction for extended periods of time. A major uptrend is when each successive advance of the primary trend peaks and troughs higher than the one preceding it, and can last from several months to several years. Read more

Majority Shareholder

A majority shareholder refers to a shareholder who owns over 50% of stock in a company. A single shareholder who maintains ownership of more than 50% of a company's outstanding stock qualifies as a majority shareholder. Read more

Make a Market

Making a market is a process whereby a person or brokerage house that is always prepared to buy and sell securities in order to provide liquidity to the markets. In order to make a market, a brokerage firm must be willing to hold a disproportionately large amount of a given security so that it can satisfy a high volume of market orders in a matter of seconds at competitive prices. Read more

Make to Assemble (MTA)

Make to Assemble (MTA) is a manufacturing strategy whereby the manufacturer creates or obtains all of the components of its products but does not assemble the product until a customer places an order. For example, let's say Company XYZ manufactures tables. Read more

Make Whole Call (Provision)

A make-whole call provision is a call provision attached to a bond, whereby the borrower must make a payment to the lender in an amount equal to the net present value of the coupon payments that the lender will forgo if the borrower pays the bonds off early. Let's say John Doe buys a Company XYZ bond that matures in 20 years but has a make-whole call provision. Read more

Making Home Affordable (MHA)

Making Home Affordable is a government program designed to help homeowners avoid foreclosure. The Making Home Affordable program is actually a collection of several programs: Home Affordable Modification Program (HAMP) Principal Reduction Alternative SM (PRA) Second Lien Modification Program (2MP) FHA Home Affordable Modification Program (FHA-HAMP) USDA’s Special Loan Servicing Veterans Affairs Home Affordable Modification (VA-HAMP) Home Affordable Foreclosure Alternatives Program (HAFA) Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP) Home Affordable Refinance Program (HARP) FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance) Home Affordable Unemployment Program (UP) Hardest Hit Fund (HHF) These programs have a variety of qualification guidelines and requirements, but in general they seek to lower homeowners' monthly loan payments, lower the interest rate on homeowners' mortgages, and help homeowners adjust the principal balances on their mortgages if necessary. Read more

Malfeasance

Malfeasance is the legal term for intentionally doing something that is illegal. Let's say John Doe is Jane Smith's broker. Read more

Malpractice Insurance

Malpractice insurance is liability insurance for doctors and other health care professionals. Let's say John Doe needs surgery to amputate his left foot. Read more

Man-Year

A man-year is a measure of how much work one person does in a calendar year. For example, let's say the Facilities Maintenance Department of the University of XYZ bills the other departments of the university for the time it spends fixing, repairing, replacing, or responding to maintenance requests. Read more

Managed Account

A managed account is an investment account in which a financial advisor or other kind of money manager is responsible for managing in the best interests of a client or beneficiary. Let's say John Doe opens a managed account with Jane Smith, who is a financial advisor. Read more

Managed Currency

Managed currency is currency whose exchange rate is controlled by a central bank. Let's say Country X's currency is called the Widget. Read more

Managed Distribution Policy

A managed distribution policy is an issuer's commitment to make a fixed periodic dividend payment. This means investors can buy shares of a security with the confidence that they will receive a reliable distribution instead of a constantly changing payment. Read more

Managed Futures Account

A managed futures account is an alternative asset created and maintained by a commodity trading advisor (CTA). The account invests in commodity futures contracts. Read more

Managed Futures Fund

A managed futures fund is an alternative asset created and maintained by a commodity trading advisor (CTA). The fund invests in commodity futures contracts. Read more

Management Audit

A management audit is an assessment of how an organization applies its resources and its strategies. Let's say that Company XYZ wants to conduct a management audit. Read more

Management Buyout (MBO)

A management buyout (MBO) occurs when the current management of a company acquires a controlling interest or the entire interest in a company from existing shareholders. For example, Company XYZ is a publicly traded company where management controls 30% the company's stock and the remaining 70% is stock floated to the public. Read more

Management Discussion and Analysis

In the financial world, a management discussion and analysis (MD&A) is a written explanation of a public company's performance for the reporting period. The explanation appears in the company's disclosures to the Securities and Exchange Commission (usually the 10-K and 10-Q). Read more

Mancession

A mancession is a situation in which the employment rate of men is lower than the employment rate for women. Let's say the employment rate for women is 95%. Read more

Mandatory Convertible

Mandatory Convertibles are hybrid securities (bonds linked to equities) that automatically convert to equity (stock) at a pre-determined date. Common names are PERCS (Preferred Equity Redemption Cumulative Stock) and DECS (Debt Exchangeable for Common Stock or Dividend Enhanced Convertible Securities). Read more

Manufacturer's Suggested Retail Price (MSRP)

A manufacturer's suggested retail price (MSRP) is a price that a product manufacturer tells retailers to charge for their products. Let's say Company XYZ manufactures the "Hot Stuff" line of men's clothing. Read more

Margin

Margin can be defined in two main ways:  It is the ratio of profit divided by revenue. This financial ratio is used to determine a company’s profitability. Read more

Margin Account

A margin account is a brokerage account that allows investors to borrow money (leverage) from the broker in order to purchase securities. Let's assume you have $2,500 and Company XYZ trades at $5 a share. Read more

Margin Call

A margin call is a brokerage firm's demand that a margin-account client deposit securities or cash into their account in order to bring the account balance up to the minimum maintenance margin requirement. Let's assume you want to buy 1,000 shares of Company XYZ for $5 per share but don't have the $5,000 necessary to do so -- you only have $2,500. Read more

Margin Debt

Margin debt is debt obtained from buying on margin. Buying on margin refers to borrowing from a brokerage firm (through a margin account) to make an investment. Read more

Margin of Safety

Margin of safety is the amount by which a company's shares are trading below their intrinsic value. The formula for margin of safety is: Margin of Safety = 1 - Stock's Current Price / Stock's Intrinsic Value Let's look at an example. Read more

Marginal Tax Rate

Marginal tax rate is the rate at which an additional dollar of taxable income would be taxed. It is part of a progressive tax system, which applies different tax rates to different levels of income. Read more

Marital Deduction

The marital deduction refers to the deduction the IRS allows for a taxpayer to transfer some or all of his assets tax free to his spouse prior to the calculation of estate tax owed by his estate. The marital deduction is also known as the unlimited marital deduction. Read more

Marital Property

Marital property is property owned by a married couple. Let's say John Doe and Jane Smith get married. Read more

Mark-to-Management

Mark-to-management is an accounting practice that prices an asset based on what management estimates its potential value to be under normal market conditions. It is the opposite of mark-to-market. Read more

Mark-to-Market (MTM)

Mark-to-market (MTM) is an accounting method that records the value of an asset according to its current market price. For example, the stocks you hold in your brokerage account are marked-to-market every day. Read more

Mark-to-Market Losses

Mark-to-market losses are losses in an asset's value caused solely by a decline in market price. Mark-to-market losses appear when an asset is priced according to a mark-to-market (MTM) accounting method. Read more

Mark-to-Model

Mark-to-model is an accounting method where asset prices are assigned using the results of a financial model. The mark-to-model pricing method puts a value on assets based on the outcome of a financial model. Read more

Markdown

Markdown refers to the negative spread between the price a broker charges a client for a security and the highest price at which that security is sold between brokers. It is the opposite of markup. Read more

Market

A market is a location where buyers and sellers meet to exchange goods and services at prices determined by the forces of supply and demand. A market may be a physical location or a virtual one over a network (for example, the internet). Read more

Market Arbitrage

Market arbitrage is a trading strategy whereby a trader sells a security in one market and buys the same security in another market. The practice of market arbitrage is based on assuming that an asset traded worldwide is priced differently in different markets. Read more

Market Average

A market average is the general level of prices in a stock market as expressed by a basket of frequently traded stocks. A market average, best exemplified by the Dow Jones Industrial Average (DJIA) and the S&P 500 Index, is based on a basket of stocks, not all the stocks that trade on any given day. Read more

Market Basket

A market basket is a group of items that simulate the overall price movements in a market. At an economic level, a market basket is a permanent set of goods and services that are bought and sold as staples in a functional economy. Read more

Market Breadth

Market breadth is a ratio that compares the total number of rising stocks to the total number of falling stocks. Market breadth, or stock-market breadth, is used in technical analysis to gauge the general direction of the stock market based on all traded stocks. Read more

Market Cannibalization

Market cannibalization refers to a reduction in sales volume or market share of a product as a result of the introduction of a new product made by the same company.   Market Cannibalization is also referred to as corporate cannibalism. Read more

Market Capitalization

Market capitalization refers to the value of a company's outstanding shares.   The formula for market capitalization is: Market Capitalization = Current Stock Price x Shares Outstanding It is important to note that market capitalization (sometimes called "market cap") is not the same as equity value, nor is it equal to a company's debt plus its shareholders' equity (although that is sometimes referred to as simply the company's capitalization). Read more

Market Capitalization Rule

The market capitalization rule is a regulation that places a floor on the total value of a company's stock for 30 consecutive days. The market capitalization rule was established by the New York Stock Exchange (NYSE) in 2004. Read more

Market Conversion Price

The market conversion price is the price at which a convertible security is exchanged for common stock. Convertible securities (for example, convertible bonds and convertible preferred stocks) allow holders to exchange them for shares of the issuing company's common stock. Read more

Market Correction

A market correction refers to a price decline of at least 10% of any security or market index following a temporary upswing in market prices. The stock market's value is always rising and falling. Read more

Market Cycles

Market cycles are the periods of growth and decline in a market, sector or industry. In a quantitative sense, market cycles are visible in price movements that rise, fall, and return to their point of origin. Read more

Market Depth

Market depth refers to a security's ability to tolerate the execution of large market orders without having a large effect on the security's price. Also called depth of market, market depth measures the number of units that must be traded before a stock or bond's price moves. Read more

Market Discipline

Market discipline refers to the obligation by banks and financial institutions to manage their stakeholders' risk in the course of their day-to-day operations. Banks and other financial institutions assume some level of risk with each loan they disburse. Read more

Market Discount

Market discount is the loss in market value sustained by a bond following an increase in interest rates. In the secondary bond market, bond prices move inversely to interest rates. Read more

Market Disruption

A market disruption is a sharp, rapid weakening of market performance in response to external forces. A market disruption often occurs as a result of an event or group of events that are widely perceived as economically detrimental. Read more

Market Distortion

A market distortion occurs as a result of a government's involvement in a market through monetary or fiscal policies. Governments frequently intervene in a country's economy and implement policy measures. Read more

Market Dynamics

Market dynamics are the interaction of supply and demand as the basis for setting prices. A fundamental concept of macroeconomics is the relationship between supply and demand as the principle forces behind the price of goods and services. Read more

Market Economy

A market economy is structured to allow market forces to determine prices with little or no government involvement. In theory, a market economy's functions are based on fluctuations in supply and demand for specific goods and services across an entire market. Read more

Market Efficiency

Market efficiency is the degree to which stock prices reflect all available information. In general, there are two kinds of market efficiency. Read more

Market Exposure

Market exposure is the degree to which a portfolio invests in a particular stock or market sector. An investment portfolio is made up of several types of assets (for example, stocks, bonds, real estate, commodities, etc. Read more

Market Failure

A market failure occurs when the supply of a good or service is insufficient to meet demand. This results in an inefficient distribution of resources among market participants. Read more

Market Identifier Code (MIC)

A market identifier code (MIC) is a four-letter or digit abbreviation that represents a specific stock market. MICs always begins with the letter "X," followed by a combination of three additional letters and/or numbers. Read more

Market If Touched (MIT)

Market if touched (MIT) is an order that will be executed only if a security reaches (touches) a specific price. Investors place an MIT order with a broker if they wish to delay buying or selling a security until its price becomes more advantageous. Read more

Market Index

A market index is a metric that tracks the performance of a group of stocks. Some indices are designed to indicate the overall performance of the market, while others follow a particular sector. Read more

Market Index Target-Term Security (MITTS)

A market index target-term security (MITTS) is a debt security that offers potential upside based on gains in a market index while limiting downside losses by guaranteeing the initial investment will be returned if the index declines. First conceived by Merrill Lynch, a MITTS is a debt obligation that exposes an investor to upside fluctuations in a stock market index such as the Dow Jones Industrial Average (DJIA) or S&P 500 Index. Read more

Market Indicators

Market indicators are quantitative factors that predict the future behavior of market indices. Market indicators are used in technical analysis to forecast market trends. Read more

Market Jitters

Market jitters refers to apprehension among buyers and sellers resulting in choppy and unpredictable market performance. Unfavorable news regarding economic indicators, earnings reports, interest rates, etc. Read more

Market Letter

A market letter is a publication that offers information and advice about specific market sectors and types of securities. Market letters offer advice to investors interested in investing in a particular market industry or type of security. Read more

Market Maker

A market maker is a person or brokerage house that is always prepared to buy and sell securities in order to provide liquidity to the markets. By holding a disproportionately large number of a given security, a market maker is able to satisfy a high volume of market orders in a matter of seconds at competitive prices. Read more

Market Maker Spread

A market maker spread is the difference between the bid and ask prices offered by a market maker. The market maker spread is calculated by subtracting a market maker's ask price (price at which he/she is willing to sell a security) from the bid price (price at which he/she is willing to purchase a security). Read more

Market Maven

A market maven is a person who keeps abreast of market news and is a successful investor. A market maven is someone who conscientiously absorbs information and news about the financial markets on a continuous basis. Read more

Market Momentum

Market momentum is the perceived strength of a positive or negative change in market prices. Market momentum is the ability of a market to sustain an increase or decrease in prices. Read more

Market Neutral

Market neutral refers to an investing strategy that seeks to generate similar returns regardless of the market climate. An investor or fund manager takes a market neutral position by obtaining both long and short positions in carefully chosen securities. Read more

Market Neutral Fund

A market neutral fund is a mutual fund whose goal is consistent returns in any market climate. A market neutral fund namely generally holds both short and long share positions in specific stocks and it holds stocks that the fund managers view optimistically as well as pessimistically. Read more

Market On Close (MOC)

Market on close (MOC) is a market order that is executed at the latest possible time during a trading session. When a trader receives an MOC from a client, that trader may enter the order as late as he or she believes possible before the close of trading for that day. Read more

Market Order

A market order is an order to trade a stock at the current market price. If you do not give your broker additional instructions, the trade will automatically be entered as a market order. Read more

Market Orientation

Market orientation focuses on providing products that respond to both the needs and wants of a target audience. A company using market orientation invests time researching current trends in a given market. Read more

Market Out Clause

A market out clause is a provision that allows an underwriter to withdraw from a stock underwriting contract. When an investment bank serves as an underwriter for an initial public offering (IPO), it has a contract with the issuing company to market and sell new shares of stock to investors in the primary market. Read more

Market Overhang

Market overhang refers to a decline in a stock's price driven by expectations that the price will experience further declines. Market overhang is a phenomenon whereby investors put off buying shares of a particular stock based on a widely held belief that the stock's price will continue to decline. Read more

Market Penetration

Market penetration is the percentage of a target market that consumes a product or service. Market penetration can also be a measure of one company's sales as a percentage of all sales for a product. Read more

Market Perform

"Market perform" is an expression indicating that a security experiences returns similar to the overall market. A security that investors and analysts describe as "market perform" closely follows the performance of a market indicator, like the Dow Jones Industrial Average (DJIA). Read more

Market Performance Committee

The Market Performance Committee is responsible for maintaining effective and organized trading operations on the New York Stock Exchange (NYSE). The Market Performance Committee consists of several members of the NYSE who closely observe the performance of trading specialists for individual stocks. Read more

Market Power

Market power refers to a single company's ability to control the market price of a good or service. The macroeconomic concept of perfect competition assumes that no one producer can set a price for the whole market. Read more

Market Price

Market price is the price of an asset or product as determined by supply and demand. In the broadest sense, an item's market price lies at the point of intersection between the available supply of the good or service and market demand for it. Read more

Market Proxy

A market proxy is a variable that theoretically simulates the behavior of the overall market. Analysts and investors use market proxies as part of statistical analyses and portfolio modeling. Read more

Market Psychology

Market psychology refers to the manner in which the market reflects its participants' collective emotional state. Peoples' perceptions of the market directly impact price movements and trends. Read more

Market Risk

Market risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets. Market Risk is also referred to as systematic risk or non-diversifiable risk. Read more

Market Saturation

Market saturation is the maximum sales volume for a product or service under current market conditions assuming a constant level of demand. When the number of units of a given product or service has leveled off, resulting in a decline in further sales, that product or service has reached its market saturation. Read more

Market Segment

A market segment is a discrete group of individuals who bear a number of similar characteristics. A market segment is characterized as a homogeneous population within a given market whose members display similar responses to certain stimuli and bear distinct social, cultural, and economic features. Read more

Market Segmentation

Market segmentation is a marketing strategy that separates individuals in a market into discrete groups based on certain criteria. Market segmentation is predicated on the notion that a given product or service may be effectively marketable to only certain individuals. Read more

Market Segmentation Theory

Market segmentation theory posits that the behavior of short-term and long-term interest rates are mutually exclusive. Market segmentation theory suggests that the behavior of short-term interest rates is wholly unrelated to the behavior of long-term interest rates. Read more

Market Sentiment

Market sentiment is the general feeling about the climate of the market as expressed by the direction of market prices. Market sentiment, as the name suggests, describes the outlook of investors in a market. Read more

Market Share

Market share refers to a company's portion of sales within the entire market in which it operates. This metric indicates a company's size within its market. Read more

Market Standoff Agreement

A market standoff agreement restricts the ability of insiders to sell their holdings following an initial public offering (IPO). When a company issues new shares of stock, it contracts a brokerage house to serve as an underwriter. Read more

Market Strategist

A market strategist is an individual who makes investment recommendations based on available market information. A market strategist tries to predict the future market climate as a pretext for buying and selling investments. Read more

Market Surveillance

Market Surveillance is a unit of the NASDAQ stock exchange whose function is to ensure that all trading is conducted in a compliant manner. The Market Surveillance unit of the NASDAQ stock exchange is responsible for monitoring trading activity. Read more

Market Swoon

A market swoon is an abrupt fall in the value of a market index. Derived from a term meaning "to faint" or "pass out," market swoon is a vernacular expression that describes a sudden and widespread loss in the value of stocks across an entire market. Read more

Market Technicians Association (MTA)

The Market Technicians Association (MTA) is a professional association for technical analysts. The MTA is a nonprofit association that fosters an environment of ethics and professionalism among Chartered Market Technicians (CMTs). Read more

Market Timing

Market timing is the practice of buying and selling securities based on economic trends, corporate information, and market factors.  Market timing can also be referred to as tactical asset allocation or active investing. Read more

Market Value

Market value refers to the current price of an asset, market-traded security, or company. More simply, it’s used to describe the value of these on the market. Read more

Market Value Added

Market Value Added is the difference between the capital contributed to the company by bondholders and shareholders and the final market value of the product. The formula used to find market value added is: Market Value Added = Market Value - Capital Invested Increasing MVA or increasing shareholder wealth is the primary goal of any business and the reason for its existence. Read more

Market Value of Equity

Market value of equity is the total market value of all of a company's outstanding shares. A company's market value of equity -- also known as market capitalization -- is the current market price of a company's stock multiplied by the number of all outstanding shares in the market. Read more

Market versus Quote (MVQ)

Market versus quote (MVQ) refers to the most recent market price at which a security was either bought or sold with regard to the latest bid and ask prices. MVQ is the difference between the last market price at which a security was bought or sold and the most recent bid and ask prices. Read more

Market-Linked CD

A market-linked certificate of deposit (CD), also called an indexed or equity-linked CD, is a type of CD where the rate of return is based on either a market index, a basket of equities, or a combination of the two. When the market is doing well, so is the return on the CD. Read more

Marketable Securities

Marketable securities are financial instruments that can be sold or converted into cash (at reasonable value) within one year. They are highly liquid investments that are generally issued by businesses to raise funds for operating expenses or expansion. Read more

Marketing Mix

The definition of marketing mix can best be described as the combination of elements used to promote products or services. These variable elements are based upon the analysis of the “four P’s” of marketing: product, price, place, and promotion. Read more

Markowitz Efficient Set

The Markowitz efficient set, also called the efficient frontier, is a mathematical concept that reflects the combinations or portfolios that generate the maximum expected return for various levels of risk. In 1952, Harry Markowitz set the efficient frontier idea in motion when he published a formal portfolio selection model in The Journal of Finance. Read more

Marriage Tax

The marriage tax, also known as the "marriage penalty," refers to the higher taxes a couple pays when they file a joint tax return versus the amount a couple pays when filing two separate tax returns. The marriage tax was created in 1969, when Congress attempted to give a tax advantage to married couples. Read more

Married Filing Jointly

Married filing jointly is a tax status that some couples use on their tax returns. Let's say John and Jane Doe are married. Read more

Master Limited Partnership (MLP)

A master limited partnership (MLP) is a publicly traded limited partnership. shares of ownership are referred to as units. Read more

Master of Business Administration (MBA)

A Master of Business Administration (MBA) is a graduate degree in business. An MBA typically involves the study of accounting, financial markets and instruments, corporate strategy, negotiation, business ethics, statistical analysis, marketing and management. Read more

Master of Public Administration (MPA)

A Master of Public Administration (MPA) is a graduate degree in public administration. An MPA typically involves the study of management, government, public policy, ethics and law. Read more

Matching Contribution

The term matching contribution refers to a matching dollar amount contributed by an employer to the retirement savings account of an employee who makes a similar contribution, usually to a 401(k) plan. These are contributions made by a company in addition to and conditional upon the salary deferral contributions made by the participating employee. Read more

Material Insider Information

Material insider information is material, nonpublic information about a security or its issuer. Information is material if it might reasonably influence the users of the issuer’s financial statements. Read more

Matilda Bond

Also known as a kangaroo bond, a Matilda bond is a bond issue in the Australian market by a non-Australian company.   Let's say Company XYZ is headquartered in San Diego. Read more

Mature Industry

A mature industry has passed the rapid growth stage and has an established pattern of market share, earnings, and profits. All industries pass through various stages of growth, stability and decline. Read more

Maturity

Maturity is the date on which a bond or preferred stock issuer must repay the original principal borrowed from a bondholder or shareholder. Let's assume that on January 1, 2000, you purchased an XYZ Company bond that had a 10-year maturity. Read more

Maturity Date

Maturity date refers to the date on which the principal and interest associated with a debt security must be repaid to the holder in its entirety. Debt instruments such as bonds, CDs, and commercial paper are issued with a lifespan that terminates on a specific date, known as the maturity date. Read more

McClellan Oscillator

The McClellan Oscillator was first designed by Sherman and Marian McClellan in 1969. It is an excellent tool for determining the overbought or oversold condition of the stock market. Read more

McMansion

A McMansion is a derogatory slang term for a fancy house that looks like all the other houses in the neighborhood or region. Let's say John and Jane Doe buy a house in McMinnville. Read more

Mean

The mean is the average of a series of numbers.   The formula for calculating a mean is: Mean = (X1 + X2 + X3 +. Read more

Mean Reversion

Mean reversion is the theory that interest rates, security prices, or various economic indicators will, over time, return to their long-term averages after a significant short-term move. Mean reversion is a strategy practiced by many quantitative hedge funds and day traders, and can be a self fulfilling prophecy. Read more

Measuring Principle

The measuring principle allows traders to set a specific minimum price target when trading a stock. This technique works with any well-defined technical analysis pattern, such as a head and shoulders, rectangle or triangle. Read more

Medicaid

Medicaid is a U. S. Read more

Medicare

Medicare is the United States federal government health insurance program for Americans who are 65 years of age and older. When a U. Read more

Mega Cap

Mega cap is a designation for any company with a market capitalization in excess of $200 billion. The largest companies in the world are referred to as mega caps because of their relative market size and value. Read more

Mercantilism

Mercantilism is an economic system promoting the idea that government regulation of international trade leads to the creation of wealth to restore or increase domestic power.

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Merchant Bank

A merchant bank is a financial institution that engages in underwriting and business loans, catering primarily to the needs of large enterprises and high net worth individuals. In the British market, the term merchant bank refers to an investment bank. Read more

Merger

Using historical merger examples and straightforward language, this is the simplest definition of merger anywhere. ​

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Mergers & Acquisitions (M&A)

Mergers & acquisitions (M&A) refer to the management, financing, and strategy involved with buying, selling, and combining companies. A merger or an acquisition usually starts out with a series of informal discussions between the boards of the companies, followed by formal negotiation, a letter of intent, due diligence, a purchase or merger agreement, and finally, the execution of the deal and the transfer of payment. Read more

Michael Milken

Coined the "Junk Bond King" during the 1980s, Michael Milken was instrumental in engineering a lucrative junk-bond market before being indicted on numerous counts of securities fraud. After serving a brief prison sentence from 1989 to 1991, he became a philanthropist supporting advances in medical treatments. Read more

Micro Cap

Generally speaking, a micro cap is a company worth between $50 million and $300 million. A company's market capitalization is the market value of all the company's stock. Read more

Mid Cap

A mid cap is generally described as a company with a market capitalization between $2 billion and $10 billion. Market capitalization is a measure of the market value of a company. Read more

Mileage Allowance

The term mileage allowance refers to a variety of travel allowances allowed by the IRS at a specific rate per mile traveled while on business or for other purposes recognized by the IRS. For an individual, the allowances would be applicable for travel required for medical reasons, moving purposes, employee travel that was not reimbursed, or charity efforts. Read more

Mine and Yours

"Mine" and "yours" are colloquial references to buy and sell transactions. Buy and sell trades are a cornerstone of the capital market. Read more

Mineral Rights

Mineral rights are a landowner's rights regarding natural resources located on his or her land. When an individual buys or owns a piece of land, there is the possibility that the land may contain valuable minerals and or natural resources like precious metals (for example, gold and silver), iron ore or oil. Read more

Mini-Sized Dow Options

Mini-sized Dow options are leveraged option contracts that use the Dow Jones Industrial Average as the underlying asset. Bought and sold on the Chicago Board of Trade (CBOT), mini-sized Dow options have a leverage ratio of 5:1. Read more

Mini-Tender

A mini-tender is an offer from an outside buyer for up to 5% of a company's stock. In a traditional tender offer, a company offers to repurchase shares of stock from its investors at a certain price per share. Read more

Minimum Investment

Minimum investment is the least amount of money an investor must invest to take part in a specific investment. Many types of investments have a minimum investment, including mutual funds, certificates of deposit (CDs), unit trusts, limited partnerships and hedge funds. Read more

Minimum Lease Payments

Minimum lease payments are the lowest total amount that a renter can expect to pay during the term of a lease. When a landlord contracts a renter, the renter agrees to pay the landlord a specific periodic amount, or lease rate, for a predetermined amount of time (usually one year). Read more

Minimum Price Contract

A minimum price contract is a futures contract with a price floor. A minimum price contract has a provision that places a lower limit on the price of a futures contract's underlying asset. Read more

Minimum Wage

Minimum wage is the lowest hourly amount an employer may legally pay an employee. In the United States, the amount varies from state to state. Read more

Minimum-Interest Rules

Minimum-interest rules are federal regulations requiring that all loans bear interest. Many companies and individuals make loans. Read more

Minor Downtrend

A minor downtrend is a corrective movement in the market -- lasting less than three weeks -- that goes against the direction of a secondary uptrend. The minor trend is the last of the three trend types in Dow Theory -- the other two types are primary and secondary trends. Read more

Minor Uptrend

A minor uptrend is a corrective movement in the market -- lasting less than three weeks – that goes against the direction of a secondary downtrend. The minor trend is the last of the three trend types in Dow Theory -- the other two types are primary and secondary trends. Read more

Minsky Moment

A Minsky moment refers to a sharp decline in prevailing market sentiment and economic productivity after a long period of widespread optimism. Times of robust economic growth, like that experienced by the U. Read more

Minus Tick

Also known as a downtick, a minus tick occurs when a security sells at a price less than the preceding sale. A minus tick is the opposite of an uptick. Read more

Mobile Banking

The broadest definition of mobile banking refers to any banking activities conducted on a cell phone. Common functions of mobile banking include receiving text alerts for fraudulent activities, accessing your account via the bank’s app, and using the bank’s website on your mobile device. Read more

Mobile Phone Banking

Mobile phone banking is the use of a smartphone or other cellular device to accomplish tasks such as checking account balances, transferring funds between accounts, bill payment and finding an ATM while away from a computer. Mobile phone banking typically operates across all major U. Read more

Mom and Pop

A "mom and pop" business is a colloquial reference to a small, independently owned and operated business with few employees and relatively low sales volume.   "Mom and pop" investors are typically unsophisticated investors who are not involved in investment activities on a professional basis. Read more

Momentum Fund

A momentum fund invests in companies with a trend of positive earnings or price, expecting a further increase in the price of the stock. Momentum funds evaluate the trends for individual companies in the stock market. Read more

Monday Effect

The Monday effect predicts that performance in equity markets will reflect the trends that were influencing the market toward the end of trading the previous Friday. The reasons for the Monday effect are not well understood. Read more

Monetarism

Monetarism is a well-known macroeconomic school of thought developed by Milton Friedman. The Great Depression and its resulting high unemployment greatly influenced the development of macroeconomics. Read more

Monetary Policy

Monetary policy is the means by which the Federal Reserve manipulates the U. S. Read more

Monetize

To "monetize" something is to convert non-revenue generating assets into sources of revenue.  In economic terms, monetize means to convert any event, object or transaction into a form of currency or something with transferable value. Read more

Money

Money is a medium of exchange for goods or services within an economy. Philosophically, anything can be money, but coins and paper notes are the most generally accepted forms. Read more

Money Factor

Money factor represents the interest you pay when you lease a car. It is included in your monthly lease payment. Read more

Money Manager

A money manager is an individual responsible for managing an investment portfolio, providing investment advice and planning portfolio strategies. A money manager buys and sells securities in a portfolio for clients and advises clients about what actions they should take in order to increase their returns. Read more

Money Market Account

Money market accounts are a type of savings account that can be opened at any bank or credit union. Money market accounts usually offer higher interest rates than checking accounts and also allow individuals to write checks and use a debit card. Read more

Money Market Fund

A money market fund is a type of mutual fund that invests in high quality, short-term debt securities. Money market funds are characterized by high liquidity, meaning they can be readily converted into cash. Read more

Money Market Rates

Money market accounts (also known as high-yield savings accounts) offer a safe way to earn returns on your money while still keeping access to the funds. The returns you earn are based on the money market rate. Read more

Money Market Yield

The money market yield is the interest rate earned by investing in highly liquid and short-term securities. It is calculated by adjusting the holding period to its bank year (360 days) equivalence. Read more

Monopoly

A monopoly is a market environment where there is only one provider of a certain economic good or service. For a true monopoly to be in effect, each of the following characteristics would typically be evident:A sole provider of a viable product or service. Read more

Moody's

Moody's Corporation (NYSE:MCO) is a publicly traded financial services company. Moody's Corporation operates two segments: Moody's Investor Service and Moody's Analytics. Read more

Moore's Law

Moore's law describes the computing hardware trend that transistors on an integrated circuit will double every two years. In 1965, Gordon E. Read more

Morningstar Risk Rating

The Morningstar risk rating is Morningstar's evaluation of a mutual fund's level of risk. The mutual fund ratings agency Morningstar ascribes a risk rating to each fund it covers. Read more

Mortgage

Homeownership is a cornerstone of the American Dream. A home is a valuable asset for most people, and mortgages (or home loans) make buying one possible for many Americans. Read more

Mortgage Accelerator

A mortgage accelerator is a type of checking account that allows a borrower to repay a mortgage more quickly using the balance of monthly paychecks as opposed to recurring monthly payments. Common in the United Kingdom and Australia, a mortgage accelerator is a checking account connected directly to a mortgage account. Read more

Mortgage Allocations

Mortgage allocations refer to the specific mortgage information given to an MBS buyer by an MBS seller. Mortgage-backed securities (MBS) trade in the secondary market as to-be-announced trades. Read more

Mortgage Application

A mortgage application is a document that a prospective property buyer submits to a lender to secure a mortgage. The lender must approve the application before any money is lent. Read more

Mortgage Banker

A mortgage banker is a person or entity who lends mortgages. A mortgage banker may be a sole agent or larger institution that originates mortgages to property buyers in exchange for a commission. Read more

Mortgage Bankers Association (MBA)

The Mortgage Bankers Association (MBA) is a professional organization that represents the property finance industry in the United States. The Mortgage Bankers Association facilitates communication among mortgage bankers and provides ethical standards to ensure transparent and fair mortgage lending throughout the industry. Read more

Mortgage Bond

A mortgage bond uses a mortgaged property as collateral. A mortgage bond is collateralized by one or several mortgaged properties. Read more

Mortgage Broker

A mortgage broker is an agent who connects property buyers with mortgage lenders. A mortgage broker acts as a professional intermediary on a property buyer's behalf. Read more

Mortgage Cash Flow Obligation (MCFO)

A mortgage cash flow obligation (MCFO) is a debt security that uses payments on a series of mortgages to fund principal and interest payments to MCFO holders. An MCFO pays interest and principal payments at a specified rate similar to a bond. Read more

Mortgage Credit Certificates (MCC)

Mortgage credit certificates (MCC) are issued by state or local governments and allow some taxpayers to receive a tax credit for the interest paid on a mortgage. A borrower pays a specific amount of interest over the course of a mortgage. Read more

Mortgage Equity Withdrawal (MEW)

A mortgage equity withdrawal (MEW) is a loan that uses the value of a mortgaged property as collateral. When a property is worth more than is owed on it, it has positive equity. Read more

Mortgage Excess Servicing

Mortgage excess servicing is the percentage remainder of the annual yield on a mortgage-backed security (MBS) once it has been allocated between the holder, the servicer, and the underwriter. The annual yield on an MBS is divided into three components: interest and principal for the holders and fees for the servicer and underwriter. Read more

Mortgage Fallout

Mortgage fallout is the percentage of an originator's mortgages that fail to close. A mortgage originator maintains a number of clients for whom it secures mortgages at competitive rates. Read more

Mortgage Forbearance Agreement

A mortgage forbearance agreement is a contractual arrangement between a mortgage lender and a borrower to help the borrower catch up on payments when he/she is behind schedule. A borrower makes monthly payments of principal and interest over the term of the mortgage (usually 30 years). Read more

Mortgage Fraud

Mortgage fraud refers to an applicant's untruthful representation of information on a mortgage application. Mortgage applications ask for a variety of details concerning an applicant's financial position. Read more

Mortgage Insurance

Mortgage insurance is insurance for lenders that covers losses resulting from borrower default. Mortgage lenders assume a high degree of risk in connection with home loans. Read more

Mortgage Interest

Mortgage interest is the compensation a borrower pays a lender for money used to purchase property. Mortgage interest is the percentage charged on a mortgage that must be paid in addition to the principal. Read more

Mortgage Interest Deduction

A mortgage interest deduction allows mortgage borrowers to reduce their income tax liability by listing the amount of mortgage interest paid as an itemized deduction. Each year, a mortgage borrower pays a combination of interest and principal to the lender. Read more

Mortgage Life Insurance

Mortgage life insurance is an insurance policy which fully repays the balance of a mortgage in the event the borrower dies. Mortgages have long-term horizons -- usually 30 years. Read more

Mortgage Originator

A mortgage originator is an individual or institution that collaborates with the borrower to complete a mortgage transaction. Mortgage originators facilitate the mortgage application process from the time a prospective borrower expresses interest until the mortgage loan itself has been disbursed. Read more

Mortgage Points

Mortgage points (also called interest rate points or discount points) are fees you can pay to a lender at closing to lower your mortgage's interest rate -- or annual percentage rate (APR). The cost of each point is equal to one percent of the loan amount. Read more

Mortgage Pool

A mortgage pool is a group of mortgages in a mortgage-backed security (MBS). Once a lender completes a mortgage transaction, it generally sells the mortgage to another entity. Read more

Mortgage Putback

A mortgage putback is a mandatory buyback of a mortgage by its original lender. Once a lender completes a mortgage, the lender often sells it to another investor in the secondary mortgage market. Read more

Mortgage Rate

A mortgage rate is the rate of interest a borrower pays on his or her mortgage. Mortgage rates can be either fixed or variable. Read more

Mortgage Rate Lock

A mortgage rate lock is the term in a mortgage contract that stipulates the rate the borrower will pay for the entire duration of the mortgage. When a mortgage originator finds a competitive rate for a borrower, the rate is based on current interest rates. Read more

Mortgage Rate Lock Deposit

A mortgage rate lock deposit is a sum of money that a borrower must pay the lender to lock in a specific interest rate until a borrower's mortgage is approved and given out. When a mortgage originator finds a mortgage rate for a borrower, the offering lender often charges the borrower a fee to hold that rate until his mortgage application has been approved. Read more

Mortgage Rate Lock Float Down

A mortgage rate lock float down is a provision that allows a borrower to obtain a lower rate if interest rates decline during the process of applying for a mortgage. Lenders usually allow those applying for a mortgage to lock in a specific mortgage rate using a mortgage rate lock. Read more

Mortgage Real Estate Investment Trust (mREIT)

Mortgage real estate investment trusts (mREITs) invest in residential mortgages that have been bundled together into securities called mortgage-backed securities (MBS) Unlike a regular real estate investment trust (REIT) that own real estate properties such as shopping centers or medical office buildings, mortgage REITs own no physical property. There are two types of mREITs: non-agency and agency. Read more

Mortgage Servicing Rights (MSR)

Mortgage servicing rights (MSR) is an arrangement by which a third party promises to collect and disseminate mortgage payments in exchange for a fee. Mortgage payments are processed continually over the entire term of a mortgage. Read more

Mortgage Short Sale

A mortgage short sale is the sale of a mortgaged property for less than the remaining value of the mortgage itself. In a weak housing market, it is common for the outstanding mortgage balance on a property to exceed the market value of the property itself. Read more

Mortgage-Backed Securities (MBS)

Mortgage-backed securities (MBS) are securities that represent an interest in a pool of mortgage loans. To understand how MBS work, it's important to understand how they're created. Read more

Mortgagee

A mortgagee is a lender in a mortgage, usually a bank, credit union, or other lending institution. A mortgagee lends money to a borrower for the purpose of purchasing real estate (usually a house) in a lending deal in which the lender serves as the mortgagee and the borrower is known as the mortgagor. Read more

Mosaic Theory

In the finance world, the mosaic theory refers to a research approach whereby the analyst arrives at a conclusion by piecing together bits of publicly available information. For example, let's assume that John Doe is an analyst at Company XYZ. Read more

Moving Average

The moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security's average closing price over the last specified number of days. Read more

Moving Average Convergence Divergence (MACD)

Moving Average Convergence Divergence, or MACD (pronounced "Mack-Dee") is a technical analysis indicator developed by famous market technician Gerald Appel.   The MACD is used by traders to determine when to buy or sell a security, based on the interaction between a line constructed from two moving averages and a "trigger line. Read more

Mrs. Watanabe

Mrs. Watanabe, also referred to as "Japanese Housewives," is a slang term for small, retail investors in Japan. Read more

Multiple

A multiple is a relative valuation metric used to estimate the value of a stock. Let's look at an example to illustrate the concept. Read more

Municipal Bond

A municipal bond, commonly referred to as a "muni" bond, is a debt security issued by a state or local government. The purchaser of a municipal bond is effectively loaning money to a government entity, which will make a predetermined number of interest and principal payments to the purchaser. Read more

Municipal Bond Fund

A municipal bond fund is a mutual fund that invests primarily in securities issued by municipalities.  Municipal bonds are issued by local or state agencies to raise money for infrastructure projects, such as the construction of a convention center, water treatment facility or regional airport. Read more

Municipal Investment Trust (MIT)

Municipal investment trusts (MITs) are entities that hold a stake in numerous municipal bonds and then sell shares to the public that represent an interest in those bonds. When the municipal bonds then pay off interest or mature, the trust passes the income on to their shareholders. Read more

Municipal Securities Rulemaking Board (MSRB)

The Municipal Securities Rulemaking Board (MSRB) regulates municipal bond underwriters and dealers in an attempt to prevent fraud and manipulation in the issuance and trading of municipal bonds. Congress created the MSRB when it passed the Securities Acts Amendments of 1975. Read more

Mutual Fund

A mutual fund is a type of investment that pools funds from many individuals to invest in a wide range of securities, which may include stocks, bonds, and other assets.

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Mutual Savings Bank

A mutual savings bank (MSB) is a type of financial institution that functions much like a bank, but with a different ownership structure. Instead of shareholders owning marketable shares, a mutual savings bank is owned by its depositors, much like a credit union. Read more