Financial Dictionary

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M1

A money supply category that includes all coins, currency, Negotiable Order of Withdrawal Accounts, travelers checks and checking accounts balances. M1 category contains cash and assets that can be easily converted to currency.

M2

A money supply category that contains M1 plus all-time related deposits, non-institutional money-market funds and saving deposits.

M3

A category of money supply that contains M2 plus institutional money market accounts, large time deposits, short term repurchase agreements and all larger liquid assets. M3 category is the broadest measure of money which is used by economics to approximate the complete supply of money within a given economy.

Macro Hedge

A hedge designed to reduce or eliminate the risk of a portfolio of assets. This implies taking the offset position in the entire portfolio, in each individual asset.

Management Buy-In

A corporate action in which one management purchases another company and replaces existing management team in it because of poor results it made. These acquired companies are often undervalued due to the business results management team has achieved, and there are plenty companies that see this as a business opportunity.

Margin Account

A brokerage account with the purpose for investor to borrow the money from the broker and invest it in securities. When using Margin Account, bought securities are used as collateral and certain amount of interest must be paid to the broker. There is also a limit on the borrowed money related to the whole investment, […]

Margin Buying

An investment action of buying securities with borrowed money by using margin account and bought shares as collateral.

Margin Loan

A loan given by a broker to the investor, with the securities owned by the client as collateral. Given funds can be used for any purposes.

Margin Rate

An interest rate that brokerage charges the investor for the margin buying purposes.

Marginal Analysis

A microeconomics technique, used for predicting the changes that will affect the whole system due to the very small changes in particular variables.

Marginal Revenue

A revenue associated with one additional output produced. There is a Marginal Cost category that has to be considered. Every additional unit produced claims additional production costs. As long as the marginal revenue is higher than the marginal costs, the producer will experience profit.

Markdown

A difference between highest current bid price by dealers and the price at which dealer who bought the security will sell that same security to the customer. Dealers will often lower their prices in order to stimulate demand, while experiencing profit from extra commissions.

Marked If Touched Order (MIT Order)

Similar to a Stop Order, but is not quite the same. MIT order is activated when a security reaches some determined price, like the STOP order, but in different direction. When using a sell MIT order, broker will start selling securities only when the price rises to certain level, and vice-versa, when using a buy […]

Market Breadth

A technical analysis technique, used to anticipate the whole market tendency, by comparing the number of all advancing companies and all declining companies. If the number of upward moving companies is greater than the number of companies on downward path, it can be a good indicator that the market as whole is bullish. On the […]

Market Capitalization (MCAP)

Often called MCAP or Market Cap, stands for aggregate value of company. The sum is calculated multiplying the number of issued stocks by their current price on the market. For example, if company have 10.000.000 shares with their current price per share at $ 30, the sum of market capitalization is $300.000.000. There is a […]

Market Maker

A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately […]

Market order

An order to the broker to buy or sell some security at the best price available. Because of automated process of monitoring the prices, commissions on executing these orders are usually very low.

Market Saturation

A stage in the life of one product on the market when everyone who needs the product already has it, and potential of that product is currently maximized. Only way to achieve further growth in that product is to innovate and offer more superior product of the same kind or to achieve extended consumer demand […]

Market-Value Weighted Index

A type of stock index, in which stocks are weighted relative to their market value (market capitalization). Value of Market –Value Weighted Index is calculated by summing up whole market value of stocks in the index and dividing the aggregate with the number of stocks in the index. Market-Value Weighted Index is also known as […]

Marketable Securities

Securities that are quickly and easily converted to cash, with highly liquid market because of constant public demand.

Markup

A difference between lowest current bid price by dealers for the security, and the price at which dealer sells that security to the customer.

Master Notes

High quality commercial papers, debt instruments with a minimum value of $25.000.000. Master Notes are issued by the Federal Farm Credit Bank, with one year maturity period.

Master Of Business Administration – MBA

A graduate degree achieved that provides theoretical and practical training to help graduates gain a better understanding of general business management functions. The core courses in the MBA program are designed to introduce students to the various areas of business such as accounting, finance, marketing, human resources, operations management, etc. Students in MBA programs have […]