Investing Advice

Definitions of Investing, Legal, & Business Terms

  Investing Term Dictionary
Choose below the first letter of the investment term you would like defined.
MI: The amount of U.S. currency in circulation at any given point in time, plus consumer bank deposits.
M2: Ml plus overnight European transactions, savings, and money market mutual fund trans- actions.
M3: A broad measure of the money supply, including MI, M2, and time deposits over $100,000 in value.
Manufacturer's Agent: An independent salesperson representing a manufacturing firm or firms on a non-exclusive basis. Such arrangements reduce the need for manufacturers to keep large sales forces on staff.
Margin: Money borrowed from a brokerage house, usually to purchase more securities, using your securities as collateral.
Marginal Cost: The cost of producing one more unit of a product or service beyond the planned quantity.
Market Capitalization: The total current market value of a companyís stock.
Market Order: When you tell your broker to buy a stock at the current price. 
Market Maker: A dealer who maintains bid and ask pricies to buy and sell Nasdaq listed & OTC stocks. About 10 percent of NASD firms are Market Makers; a broker/dealer may become a Market Maker if the firm meets capitalization standards set down by NASD.
Market Share: The percentage of total industry sales that one company is responsible for. For instance, XYZ Co. has $10 million in sales in the widget industry, which has a total of $100 million in sales from all companies in the industry. So, XYZ has a 10% market share. 
Market Value: The market value of a security is the last-sale price multiplied by total shares outstanding. It is calculated throughout the trading day, and is related to the total value of the index.
Marketing Mix: The tools used to market a product or service, including the price, channels of distribution, promotional methods, and the product features.
Markup: The difference between the cost to pro- duce a product and its selling price.
Material: Information relevant to a particular matter that may affect the outcome of a legal suit.
Material News: News released by a public company that might reasonably be expected to affect the value of a company's securities or influence investors' decisions. Material news includes information regarding corporate events of an unusual and non-recurring nature, news of tender offers, unusually good or bad earnings reports, and a stock split or stock dividend.
Maturity: The date on which the face value of a bond or loan becomes due and payable.
Mean: The average of a set of numbers. Calculated by adding several numbers together, counting how many numbers are being added, and then dividing by that number.
Median: The middle point in a series of numbers where half the numbers are higher and half are lower. For example, 3 is the median between I and 5.
Mediation: An informal, voluntary process used in securities industry disputes in which a mediator helps negotiate a mutually-acceptable resolution between disputing parties. Unlike arbitration or litigation, mediation does not impose a solution. If the parties cannot negotiate an acceptable settlement, they may still arbitrate or litigate their dispute. Also see arbitration.
Mode: The number appearing most frequently in a series of numbers. For instance in the series 1,2,5,2,7,2,8, 2 is the mode, appearing more frequently than any of the other numbers.
Misrepresentation: A false representation of a matter of fact that should have been disclosed, which deceives another so that he/she acts upon it to his/her injury.
Mitigation of damages: The legal requirement that an individual who has been negatively affected by the action of another and who has been repaid for that action must make every effort not to hold the other responsible for any' self-inflicted aggravation to the situation.
Money Market Account: Accounts opened at financial institutions such as banks who take your money and invest it in CDís, T-Bills, and short-term loans to credit-worthy companies. 
Monetary Policy: Decisions made by the Federal Reserve Board regarding the amount of money in circulation at a given point. By supplying more credit to the banking system or withdrawing credit, the Federal Reserve Board can affect the growth of the economy.
Monopoly: A market with one firm in control of the manufacture and supply of a product. Until the advent of UPS, the Postal Service was a monopoly.
Mortgage: A loan to purchase real estate, with the property used as collateral to guarantee the loan.  
Mortgage REIT: A real estate investment trust that invests in real estate mortgages.
Municipal Bonds: Bonds issued by states, cities, counties, and towns to fund public capital projects like roads, schools, sanitation facilities, bridges, as well as operating budgets. These bonds are exempt from federal taxation and from state and local taxes for the investors who reside in the state where the bond is issued.
Mutual Fund: An investment company that pools money from investors to buy stocks, bonds, or other investments.
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