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Financial dictionary terms starting with “m”
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. See More.
Companies adopt a macaroni defense by issuing bonds that are redeemable at a high price in the event of a change in control. See More.
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 See More.
Macro accounting, also called national accounting, is a method of calculating the economic activity of a country or region. See More.
A macro environment is a wide, broad set of economic conditions rather than the conditions in a specific sector or industry within an economy. See More.
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. See More.
A macroeconomic factor is a characteristic, trend or condition that comes from or applies to a broad aspect of an economy rather than a certain population. See More.
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. See More.
Macromarketing describes how marketing affects an entire society's demand for goods and services. See More.
Macroprudential analysis is analysis of the stability of an economy's financial institutions. See More.
In the business world, a mad hatter is a leader, usually a CEO, who makes unusual or impulsive decisions. See More.
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. See More.
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. See More.
A magnet employer is an employer to which people are attracted or especially interested in working for. See More.
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. See More.
Main Street refers collectively to members of the general population who invest in the capital markets. See More.
Maintenance expenses are the costs associated with keeping an asset in working order and good condition. See More.
A maintenance margin is a limit after which a brokerage firm can make a margin call. See More.
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. See More.
Major pairs are the four pairs of currencies that are most commonly traded in the foreign exchange markets. See More.
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. See More.
A majority shareholder refers to a shareholder who owns over 50% of stock in a company. See More.
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. See More.
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. See More.
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 of See More.
The idea behind Making Home Affordable is to stabilize the economy. A major contributor to the financial crisis of 2008 was a large number of defaults on home loans, which created cash crises for lenders and financial institutions that had created mo See More.
Malfeasance is the legal term for intentionally doing something that is illegal. See More.
Malpractice insurance pays for the mistakes health care professionals make due to negligence or harmful decisions. The premium can be very high, and these premiums are a controversial cost of doing business that contribute to the cost of medical care See More.
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. See More.
Managed currency is the opposite of currency whose exchange rate is determined by the amount of supply and demand for the currency in the global marketplace. Most currencies, however, are managed by their central banks to some degree in order to achi See More.
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 changi See More.
A managed futures account is an alternative asset created and maintained by a commodity trading advisor (CTA). The account invests in commodity futures contracts. See More.
A managed futures fund is an alternative asset created and maintained by a commodity trading advisor (CTA). The fund invests in commodity futures contracts. See More.
Management audits are not the same as individual performance reviews. Rather, the goal is to compare an organization's overall management quality to the rest of the industry and especially to competitors. See More.
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. See More.
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 C See More.
Mancessions indicate that men are having a tougher time finding jobs. This in turn may indicate that traditionally male occupations may be waning, that women have more marketable job skills, or that men are dropping out of the workforce to pursue oth See More.
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 Commo See More.
A manufacturer's suggested retail price (MSRP) is a price that a product manufacturer tells retailers to charge for their products. See More.
The term margin has two main definitions. The first refers to the ratio of profit to revenue. The second refers to money borrowed from a brokerage firm in order to leverage an investment. See More.
A margin account is a brokerage account that allows investors to borrow money (leverage) from the broker in order to purchase securities. See More.
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. See More.
Margin of safety is the amount by which a company's shares are trading below their intrinsic value. See More.
The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify. In essence, the marginal tax rate is the percentage taken from your next dollar of taxable income above a pre-defined income threshold. See More.
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. See More.
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. See More.
Mark-to-market (MTM) is an accounting method that records the value of an asset according to its current market price. See More.
Mark-to-market losses are losses in an asset's value caused solely by a decline in market price. See More.
Mark-to-model is an accounting method where asset prices are assigned using the results of a financial model. See More.
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. See More.
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. See More.
Market arbitrage is a trading strategy whereby a trader sells a security in one market and buys the same security in another market. See More.
A market average is the general level of prices in a stock market as expressed by a basket of frequently traded stocks. See More.
A market basket is a group of items that simulate the overall price movements in a market. See More.
Market breadth is a ratio that compares the total number of rising stocks to the total number of falling stocks. See More.
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. See More.
Market capitalization refers to the value of a company's outstanding shares. See More.
The market capitalization rule is a regulation that places a floor on the total value of a company's stock for 30 consecutive days. See More.
The market conversion price is the price at which a convertible security is exchanged for common stock. See More.
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. See More.
Market cycles are the periods of growth and decline in a market, sector or industry. See More.
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. See More.
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. See More.
Market discount is the loss in market value sustained by a bond following an increase in interest rates. See More.
A market disruption is a sharp, rapid weakening of market performance in response to external forces. See More.
A market distortion occurs as a result of a government's involvement in a market through monetary or fiscal policies. See More.
Market dynamics are the interaction of supply and demand as the basis for setting prices. See More.
A market economy is structured to allow market forces to determine prices with little or no government involvement. See More.
The strong form of market efficiency essentially proclaims that it is impossible to consistently outperform the market, particularly in the short term, because it is impossible to predict stock prices. This may be controversial, but by far the most c See More.
Market exposure is the degree to which a portfolio invests in a particular stock or market sector. See More.
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. See More.
A market identifier code (MIC) is a four-letter or digit abbreviation that represents a specific stock market. See More.
Market if touched (MIT) is an order that will be executed only if a security reaches (touches) a specific price. See More.
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. See More.
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. See More.
Market indicators are quantitative factors that predict the future behavior of market indices. See More.
Market jitters refers to apprehension among buyers and sellers resulting in choppy and unpredictable market performance. See More.
A market letter is a publication that offers information and advice about specific market sectors and types of securities. See More.
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. See More.
A market maker spread is the difference between the bid and ask prices offered by a market maker. See More.
A market maven is a person who keeps abreast of market news and is a successful investor. See More.
Market momentum is the perceived strength of a positive or negative change in market prices. See More.
Market neutral refers to an investing strategy that seeks to generate similar returns regardless of the market climate. See More.
A market neutral fund is a mutual fund whose goal is consistent returns in any market climate. See More.
Market on close (MOC) is a market order that is executed at the latest possible time during a trading session. See More.
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. See More.
Market orientation focuses on providing products that respond to both the needs and wants of a target audience. See More.
A market out clause is a provision that allows an underwriter to withdraw from a stock underwriting contract. See More.
Market overhang refers to a decline in a stock's price driven by expectations that the price will experience further declines. See More.
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. See More.
"Market perform" is an expression indicating that a security experiences returns similar to the overall market. See More.
The Market Performance Committee is responsible for maintaining effective and organized trading operations on the New York Stock Exchange (NYSE). See More.
Market power refers to a single company's ability to control the market price of a good or service. See More.
Market price is the price of an asset or product as determined by supply and demand. See More.
A market proxy is a variable that theoretically simulates the behavior of the overall market. See More.
Market psychology refers to the manner in which the market reflects its participants' collective emotional state. See More.
Market risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets. See More.
Market saturation is the maximum sales volume for a product or service under current market conditions assuming a constant level of demand. See More.
A market segment is a discrete group of individuals who bear a number of similar characteristics. See More.
Market segmentation is a marketing strategy that separates individuals in a market into discrete groups based on certain criteria. See More.
Market segmentation theory posits that the behavior of short-term and long-term interest rates are mutually exclusive. See More.
Market sentiment is the general feeling about the climate of the market as expressed by the direction of market prices. See More.
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. See More.
A market standoff agreement restricts the ability of insiders to sell their holdings following an initial public offering (IPO). See More.
A market strategist is an individual who makes investment recommendations based on available market information. See More.
Market Surveillance is a unit of the NASDAQ stock exchange whose function is to ensure that all trading is conducted in a compliant manner. See More.
The Market Technicians Association (MTA) is a professional association for technical analysts. See More.
Market timing is the practice of buying and selling securities based on economic trends, corporate information, and market factors. See More.
Market value refers to the current or most recently-quoted price for a market-traded security. It can also refer to the most probable price an asset, like a house, would fetch on the open market. See also fair market value. See More.
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. See More.
Market value of equity is the total market value of all of a company's outstanding shares. See More.
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. See More.
Marketable securities are securities or debts that are to be sold or redeemed within a year. These are financial instruments that can be easily converted to cash such as government bonds, common stock or certificates of deposit. See More.
A marketing mix is a combination of tactics a company uses to promote itself or its products. Its origins date back to the 1960s. See More.
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 See More.
The marriage penalty refers to the increased tax burden a married couple bears when they file a joint tax return versus filing two separate tax returns. See More.
The marriage tax 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. See More.
Deciding to file jointly or separately is a personal decision for couples, and deciding which one is optimal depends on the couple's income and deductions. It is important to note that from a legal perspective, filing jointly means each spouse is See More.
A master limited partnership (MLP) is a publicly traded limited partnership. Shares of ownership are referred to as units. MLPs generally operate in the natural resource, financial services, and real estate industries. See More.
A Master of Business Administration (MBA) is a graduate degree in business. See More.
A Master of Public Administration (MPA) is a graduate degree in public administration. See More.
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 See More.
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. See More.
Also known as a kangaroo bond, a Matilda bond is a bond issue in the Australian market by a non-Australian company. See More.
A mature industry has passed the rapid growth stage and has an established pattern of market share, earnings, and profits. See More.
Maturity is the date on which a bond or preferred stock issuer must repay the original principal borrowed from a bondholder or shareholder. See More.
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. See More.
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. See More.
This term is a play on the word "McDonalds," which is a global fast-food restaurant chain whose food is usually so consistent that an item from one restaurant is indistinguishable from the same item made in another restaurant. In turn, McMans See More.
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. See More.
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. See More.
Medicaid is a U.S. government program that provides free or low-cost health insurance coverage for low-income people. See More.
Medicare is the United States federal government health insurance program for Americans who are 65 years of age and older. See More.
Mega cap is a designation for any company with a market capitalization in excess of $200 billion. See More.
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 ban See More.
A merger is a corporate strategy of combining different companies into a single company in order to enhance the financial and operational strengths of both organizations. See More.
Mergers & acquisitions (M&A) refer to the management, financing, and strategy involved with buying, selling, and combining companies. See More.
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, h See More.
Generally speaking, a micro cap is a company worth between $50 million and $300 million. See More.
A mid cap is generally described as a company with a market capitalization between $2 billion and $10 billion. See More.
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. See More.
Mineral rights are a landowner's rights regarding natural resources located on his or her land. See More.
Mini-sized Dow options are leveraged option contracts that use the Dow Jones Industrial Average as the underlying asset. See More.
A mini-tender is an offer from an outside buyer for up to 5% of a company's stock. See More.
Minimum investment is the least amount of money an investor must invest to take part in a specific investment. See More.
Minimum lease payments are the lowest total amount that a renter can expect to pay during the term of a lease. See More.
Minimum margin is the lowest balance a trader may have in a margin account according to federal regulations. See More.
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. See More.
Minimum-interest rules are federal regulations requiring that all loans bear interest. See More.
A minor downtrend is a corrective movement in the market -- lasting less than three weeks -- that goes against the direction of a secondary uptrend. See More.
A minor uptrend is a corrective movement in the market -- lasting less than three weeks – that goes against the direction of a secondary downtrend. See More.
A Minsky moment refers to a sharp decline in prevailing market sentiment and economic productivity after a long period of widespread optimism. See More.
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. See More.
Mobile banking refers to the use of a smartphone or other cellular device to perform online banking tasks while away from your home computer, such as monitoring account balances, transferring funds between accounts, bill payment and locating an ATM. See More.
Mobile banking refers to the use of a smartphone or other cellular device to perform online banking tasks while away from your home computer, such as checking account balances, transferring funds between accounts, bill payment and locating an ATM. See More.
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. See More.
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 See More.
A momentum fund invests in companies with a trend of positive earnings or price, expecting a further increase in the price of the stock. See More.
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. See More.
Monetarism is a well-known macroeconomic school of thought developed by Milton Friedman. See More.
Monetary policy is the means by which the Federal Reserve manipulates the U.S. money supply in order to influence the U.S. economy's overall direction, particularly in the areas of employment, production, and prices. See More.
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. See More.
Money factor represents the interest you pay when you lease a car. It is included in your monthly lease payment. See More.
A money manager is an individual responsible for managing an investment portfolio, providing investment advice and planning portfolio strategies. See More.
A monopoly is a market environment where there is only one provider of a certain economic good or service. See More.
Moore's law describes the computing hardware trend that transistors on an integrated circuit will double every two years. See More.
The Morningstar risk rating is Morningstar's evaluation of a mutual fund's level of risk. See More.
A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays See More.
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. See More.
Mortgage allocations refer to the specific mortgage information given to an MBS buyer by an MBS seller. See More.
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. See More.
The Mortgage Bankers Association (MBA) is a professional organization that represents the property finance industry in the United States. See More.
A mortgage broker is an agent who connects property buyers with mortgage lenders. See More.
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. See More.
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. See More.
A mortgage equity withdrawal (MEW) is a loan that uses the value of a mortgaged property as collateral. See More.
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. See More.
Mortgage fallout is the percentage of an originator's mortgages that fail to close. See More.
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. See More.
Mortgage fraud refers to an applicant's untruthful representation of information on a mortgage application. See More.
Mortgage insurance is insurance for lenders that covers losses resulting from borrower default. See More.
Mortgage interest is the compensation a borrower pays a lender for money used to purchase property. See More.
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. See More.
Mortgage life insurance is an insurance policy which fully repays the balance of a mortgage in the event the borrower dies. See More.
A mortgage originator is an individual or institution that collaborates with the borrower to complete a mortgage transaction. See More.
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 lo See More.
A mortgage pool is a group of mortgages in a mortgage-backed security (MBS). See More.
A mortgage putback is a mandatory buyback of a mortgage by its original lender. See More.
A mortgage rate is the rate of interest a borrower pays on his or her mortgage. See More.
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. See More.
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. See More.
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. See More.
Mortgage real estate investment trusts (mREITs) invest in residential mortgages that have been bundled together into securities called mortgage-backed securities (MBS) See More.
Mortgage servicing rights (MSR) is an arrangement by which a third party promises to collect and disseminate mortgage payments in exchange for a fee. See More.
A mortgage short sale is the sale of a mortgaged property for less than the remaining value of the mortgage itself. See More.
Mortgage-backed securities (MBS) are securities that represent an interest in a pool of mortgage loans. See More.
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. See More.
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. See More.
Moving Average Convergence Divergence, or MACD (pronounced "Mack-Dee") is a technical analysis indicator developed by famous market technician Gerald Appel. See More.
Mrs. Watanabe, also called Japanese Housewives, is a slang term for small, retail investors in Japan. See More.
A municipal bond, commonly referred to as a "muni" bond, is a debt security issued by a state or local government. See More.
A municipal bond fund is a mutual fund that invests primarily in securities issued by municipalities. See More.
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 See More.
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 Securitie See More.