| M | Fifth letter of a NASDAQ stock symbol specifying that the issue is the company's fourth class of preferred shares. |
| M1 | Measure of the U.S. money stock that consists of currency held by the public, travelers checks, demand deposits and other checkable deposits including NOW (negotiable order of withdrawal) and ATS (automatic transfer service) account balances and share draft account balances at credit unions. |
| M-1, M-2 and M-3 | See: money supply. |
| M2 | Measure of the U.S. money stock that consists of M1, certain overnight repurchase agreements and certain overnight Eurodollars, savings deposits (including money market deposit accounts), time deposits in amounts of less that $100,000 and balances in money market mutual funds (other than those restricted to institutional investors). |
| M3 | Measure of the U.S. money stock that consists of M2, time deposits of $100,000 or more at all depository institutions, termrepurchase agreements in amounts of $100,000 or more, certain term Eurodollars and balances in money market mutual funds restricted to institutional investor. |
| MA | The two-character ISO 3166 country code for MOROCCO. |
| MAB | See: Master Air Waybill |
| MAC clause | Material adverse change clause. Permits a lender to avoid its obligations to lend or, having lent, to demand repayment if an adverse event occurs. |
| Macaroni defense | A tactic used by a corporation that is the target of a hostile takeoverbid involving the issue of a large number of bonds that must be redeemed at a higher value if the company is taken over. |
| Macaulay duration | The weighted-average term to maturity of the cash flows from a bond, where the weights are the present value of the cash flow divided by the price. |
| Macro | In the context of hedge funds, a style of management that takes long-term strategic bets. For example, the manager might believe that the Yen will appreciate relative to the dollar over the next six months and alter the portfolio to capture this potential profit opportunity. |
| Macro country risks | Country risks or political risks that affect all foreign firms in a host country. |
| Macroassessment | Overall risk assessment of a country without consideration of an MNC's business. |
| Macroeconomics | Analysis of a country's economy as a whole. |
| MAD | The ISO 4217 currency code for the Moroccan Dirham. |
| Madrid Stock Exchange (Bolsa de Madrid) | The largest of Spain's four stock exchanges. |
| Magic of diversification | The effective reduction of risk (variance) of a portfolio, achieved without reduction to expected returns through the combination of assets with low or negative correlations (covariances). Related: Markowitz diversification. |
| Mail Delay | Time a payment spends in the postal system before delivery. |
| Mail float | Time period that checks for payment spend in the postal system. |
| Mailing Date | A specific date set for the mailing of certain material to security holders such as interim reports, proxy material and dividendchecks. |
| Maintenance | Appropriate ongoing adjustments to security holder records. |
| Maintenance call | A call for additional money or securities when a margin account falls below its exchange-mandated required level. |
| Maintenance fee | A yearly charge to maintain brokerage accounts, such as asset management accounts or IRAs. |
| Maintenance margin | The dollar amount required to be kept at the OCC throughout the life of an option contract; percentage of the dollar amount of securities that must always be kept as margin. |
| Maintenance margin requirement | A sum, usually smaller than but part of the original margin, that must be maintained on deposit at all times. If a customer's equity in any futurespositiondrops to or below, the maintenance margin level, the broker must issue a margin call for the amount at money required to restore the customer's equity in the account to the original margin level. Related: Margin, margin call. |
| Majority shareholder | A shareholder who is part of a group that controls more than half the outstandingshares of a corporation. |
| Majority voting | Voting system under which corporate shareholders vote for each director separately. Related: Cumulative voting. |
| Make a market | Dealers are said to make a market when they quote bid and offeredprices at which they stand ready to buy and sell. |
| Make whole provision | Related to the lump-sum payments made when a loan or bond is called, equal to the NPV of future loan or coupon payments not paid because of the call. The payment can be significant and negate the attractiveness of a call. |
| Make-up | The amount of deficiency when a cash flow or capital item is deficient. For example, an interest make-up relates to the interest amount above a ceiling percentage. |
| Making delivery | Refers to the seller's actually turning over to the buyer the assets agreed upon in a forward contract. |
| Malaysia Commodity Exchange | A subsidiary of the KLSE that tradesinterest ratefutures on the three-month Kuala Lumpur Interbank offered rate. |
| Maloney Act | 1938 legislation amending the Securities Exchange Act that regulates the OTC market. |
| Managed account | An investmentportfolio one or more clients entrusted to a manager who decides how to invest it. |
| Managed float | Also known as "dirty" float, this is a system of floating exchange rates with central bank intervention to reduce currencyfluctuations. |
| Managed Futures | In the context of hedge funds, a style of management that focuses on short-termtrading in the futures market. |
| Management | The people who administer a company, create policies, and provide the support necessary to implement the owners' business objectives. |
| Management buying | The acquisition of a controllinginterest in a promising business by an outside investment group that retains existing management and places representatives on the board of directors. |
| Management buyout (MBO) | Leveraged buyout whereby the acquiring group is led by the firm'smanagement. |
| Management contract | An agreement by which a company will provide its organizational and management expertise in the form of services. |
| Management fee | An investment advisory fee charged by the financial adviser to a fund typically on the basis of the fund's averageassets, but sometimes determined on a sliding scale that declines as the dollar amount of the fund increases. |
| Management/closely held shares | Percentage of shares held by persons closely related to a company, as defined by the Securities and Exchange Commission. Part of these percentages often are included in "institutional holdings"--making the combined total of these percentages over 100. There is overlap as institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company. |
| Management's discussion and analysis (MD&A) | A report from management to shareholders that accompanies the firm'sfinancial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial statements in the annual report. |
| Manager | A medium-level participant established according to final take. |
| Managerial decisions | Decisions concerning the operation of the firm, such as the choice of firm size, firm growth rates, and employee compensation. |
| Managerial flexibility | Flexibility in the timing and scale of investment provided by a real investment option. |
| Managing underwriter | The leading firm in an underwriting group, which originates the deal and acts as an agent for the group. |
| Mandate | The formal appointment to advise on or arrange a project financing. |
| Mandatory convertibles | A debt instrument that is exchangeable at some point for equity in the form of common stock or a new issue. |
| Mandatory redemption schedule | Schedule according to which bondsinking fund payments must be made. |
| Manipulation | Dealing in a security to create a false appearance of activetrading, in order to bring in more traders. Illegal. |
| Manufactured housing securities (MHS) | Loans on manufactured homes-that is, factory-built or prefabricated housing, including mobile homes. |
| Maple Leaf | A gold, silver, or platinum coin minted in Canada that usually trades at slightly more than its current bullion value. |
| Margin | The difference between the rate at which a lender can borrow and the rate at which it will lend. |
| Margin | Allows investors to buysecurities by borrowingmoney from a broker. The margin is the difference between the market value of a stock and the loan a broker makes. Related: Security deposit (initial). In the context of hedging and futures contracts, the cashcollateral deposited with a trader or exchanged as insurance against default. |
| Margin account (stocks) | A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock; if the value of the stock drops sufficiently, the owner will be asked to either put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers. |
| Margin agreement | The agreement governing customers' margin accounts. |
| Margin call | A demand for additional funds because of adverse price movement. Maintenance margin requirement, security deposit maintenance. |
| Margin department | The department in a brokerage firm that monitors customers' margin accounts, ensuring that all short sales, stock purchases, and other positions are covered by the margin account balance. |
| Margin of profit | Gross profit divided by net sales. Used to measure a firm's operating efficiency and pricing policies in order to determine how competitive the firm is within the industry. |
| Margin of safety | With respect to working capital management, the difference between (1) the amount of long-term financing and (2) the sum of fixed assets and the permanent component of current assets. |
| Margin requirement | A performance bond paid upon purchase of a futures contract that protects the exchange clearinghouse from loss. |
| Margin requirement (options) | The amount of cash an uncovered (naked) option writer is required to deposit and maintain to cover his daily position valuation and reasonably foreseeable intraday price changes. |
| Margin security | A security that may be bought or sold in a margin account as defined in Regulation T. |
| Margin stock | Any stock listed on a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds. |
| Margin trading | Buying securities, in part, with borrowedmoney. |
| Marginal | Incremental. |
| Marginal cost | The increase or decrease in a firm's total cost of production as a result of changing production by one unit. |
| Marginal efficiency of capital | The percentage yield earned on an additional unit of capital. |
| Marginal revenue | The change in total revenue as a result of producing one additional unit of output. |
| Marginal tax rate | The tax rate that would have to be paid on any additional dollars of taxable incomeearned. |
| Marginal utility | The change in total satisfaction as a result of consuming one additional unit of a specific good or service. |
| Marine Cargo Insurance | Insurance covering loss or damage to goods in transit. |
| Marital deduction | A tax deduction that allow spouses to transfer unlimited amounts of property to one another. |
| Marital trust | A trust created to allow one spouse to transfer, during life or upon death, an unlimited amount of property to his/her spouse without incurring gift or estate tax. |
| Markdown | The amount subtracted from the selling price of securities when they are sold to a dealer in the OTC market. Also, the discounted price of municipal bonds after the market has shown little interest in the issue at the original price. |
| Marked-to-market | An arrangement whereby the profits or losses on a futures contract are settled each day. |
| Market | Usually refers to the equity market. "The market went down today" means that the value of the stock marketdropped that day. |
| Market analysis | An analysis of technical corporate and market data used to predict movements in the market. |
| Market break | See: Break |
| Market capitalization | The total dollar value of all outstandingshares. Computed as shares times current market price. Capitalization is a measure of corporate size. |
| Market capitalization rate | Expected return on a security. The market-consensus estimate of the appropriate discount rate for a firm'scash flow. |
| Market check | An investigation typically conducted by an investment banking firm, on behalf of a target's Board of Directors (or Special Committee) as part of a process to determine whether a proposed price for the target (or its assets) is fair. |
| Market clearing | Total demand for loans by borrowers equals total supply of loans from lenders. The market, any market, clears at the equilibrium rate of interest or price. |
| Market conversion price | Also called conversion parity price, the price that an investor effectively pays for common stock by purchasing a convertible security and then exercising the conversion option. This price is equal to the market price of the convertible security divided by the conversion ratio. |
| Market correction | A relatively short-termdrop in stock market prices, generally viewed as bringing overpriced stocks back to a level closer to companies' actual values. |
| Market cycle | The period between the two latest highs or lows of the S&P 500, showing net performance of a fund through both an up and a down market. A market cycle is complete when the S&P is 15% below the highest point or 15% above the lowest point (ending a down market). |
| Market Eye | A financial information service based in the U.K. sponsored by the ISE (International Stock Exchange of the UK and the Republic of Ireland) that provides current market and statistical information. |
| Market failure | The inability of arm's length markets to deliverer goods or services. A multinational corporation's market internalization advantages may take advantage of market failure. |
| Market impact costs | The result of a bid/ask spread and a dealer's price concession. Also called price impact costs. |
| Market index | Market measure that consists of weighted values of the components that make up certain list of companies. A stock market tracks the performance of certain stocks by weighting them according to their prices and the number of outstandingshares by a particular formula. |
| Market interest rate | Rates of interest paid on deposits and other investments, determined by the interaction of the supply of and demand for funds in the money market. |
| Market internalization advantages | Conditions that allow a corporation to exploit the failure of an arm's length market to deliver goods or services efficiently. |
| Market jitters | Anxiety among many investors, causing them to sell stocks and bonds, pushing prices down. |
| Market letter | A newsletter analyzing the market that is written by an SEC-registered investment adviser who sells the letter to subscribers. See: Hulbert Rating. |
| Market maker | Used in the context of general equities. One who maintains firm bid and offerprices in a given security by standing ready to buy or sell round lots at publicly quoted prices. See: Agent, dealer, specialist. |
| Market microstructure | The functional setup of a market. |
| Market model | The market model says that the return on a security depends on the return on the market portfolio and the extent of the security's responsiveness as measured by beta. The return also depends on conditions that are unique to the firm. The market model can be graphed as a line fitted to a plot of asset returns against returns on the market portfolio. This relationship is sometimes called the single-index model. |
| Market Neutral | In the context of hedge funds, a style of management that has long and short equity exposure with nearly exposure on average to fluctuations in the market. However, the on average qualification is important. The risk of the longs and the shorts could fluctuate through time leading to negative returns when the market falls sharply. |
| Market Not Held Order | Also a market order, but the investor is allowing the floorbroker to use his own discretion as to the exact timing of the execution. If the floor broker expects a decline in price and he is holding a "market not held buy order", he (she) may wait to buy, figuring that a better price will soon be available. There is no guarantee that a "market not held order" will be filled. |
| Market opening | The start of formal trading on an exchange. |
| Market order | Used in the context of general equities. Order to buy or sell a stated amount of a security at the most advantageous price obtainable after the order is represented in the trading crowd. You cannot specify special restrictions such as all or none (AON) or good 'til canceled order (GTC) on market orders. See: Limit order. |
| Market order go-along/participating | Used for listed equity securities. See: Percentage order. |
| Market out clause | A clause that may appear in an underwriting firm commitment that releases it from its purchase requirement if there are negative securities market developments. |
| Market overhang | The theory that, in certain situations, institutions wish to sell their shares but postpone the sale because large orders under current market conditions would drive down the share price and that the consequent threat of securitiessales will tend to retard the rate of share price appreciation. Support for this theory is largely anecdotal. |
| Market penetration/share | Used in the context of general equities. Percent of trading volume in a stock that a particular market maker trades. |
| Market Performance Committee (MPC) | A group of NYSE market oversight specialists who monitor specialists' efficiency in maintaining fair prices and orderly markets. |
| Market portfolio | A portfolio consisting of all assets available to investors, with each asset held in proportion to its market value relative to the total market value of all assets. |
| Market price | The last reported price at which a security was traded on an exchange. |
| Market price of risk | A measure of the extra return, or risk premium, that investors demand to bear risk. The reward-to-risk ratio of the market portfolio. |
| Market prices | The amount of money that a willing buyer pays to acquire something from a willing seller, when a buyer and seller are independent and when such an exchange is motivated by only commercial consideration. |
| Market research | A technical analysis of factors such as volume, price trends, and market breadth that are used to predict price movement. |
| Market return | The return on the market portfolio. |
| Market risk | Risk that cannot be diversified away. Related: Systematic risk |
| Market RRR (required rate of return) Schedule | A line that indicates the minimum return required by investors at each level of investment risk. The schedule begins at the risk-freeinterest rate and rises as risk increases. |
| Market sectors | The classifications of bonds by issuer characteristics, such as state government, corporate, or utility. |
| Market segmentation theory or preferred habitat theory | A biased expectations theory that asserts that the shape of the yield curve is determined by the supply of and demand for securities within each maturitysector. |
| Market share | The percentage of total industrysales that a particular companycontrols. |
| Market sweep | A second offering following a tender offer, allowing institutional investors to obtain a controllinginterest at a price higher than the original offer. |
| Market timer | A money manager who assumes he or she can forecast when the stock market will go up and down. |
| Market timing 1. | Used in the practice of Asset allocation. Based on public information, managers actively decide which stocks, sectors, countries, or asset classes to over or underweight. Market timing takes advantage of a small but important amount of predictability in asset returns. The strategy contrasts with the buy-and-hold strategy in which a portfolio is decided on and held for long periods of time. Market timing is an active rather than passive strategy. |
| Market timing 2. | A misnomer synonym used in reference to 2003 mutual fund scandal. The misnomer synonym refers to Stale Price Arbitrage. |
| Market timing costs | Costs that arise from price movement of a stock during a transaction period but attributable to other activity in the stock. |
| Market tone | The general state of well-being of a securities market, based mostly on trading activity. |
| Market value | (1) The price at which a security is trading and could presumably be purchased or sold. (2) What investors believe a firm is worth; calculated by multiplying the number of shares outstanding by the current market price of a firm's shares. |
| Market value ratios | Ratios that relate the market price of the firm'scommon stock to selected financial statement items. |
| Market value-weighted index | An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, where the weights are proportional to outstandingmarket value. |
| Market: Characterized by horizontal price movement, usually the result of low activity. | Equities: To execute without commission or markup. |
| Marketability | A negotiablesecurity is said to have good marketability if there is an activesecondary market in which it can easily be resold. |
| Marketable securities | Securities that are easily convertible to cash because there is high demand allowing them to be sold quickly. |
| Marketable title | A clear, reasonably incontestable title to a piece of real estate that is good for transaction purposes. |
| Market-based corporate governance system | Organization of a corporation whereby the supervisory board represents a dispersed set of largely equityshareholders. |
| Market-based forecasting | Analyzing future spot rates on the basis of a market-determined exchange rate (such as the current spot rate or forward rate). |
| Market-book ratio | Market price of a share divided by book value per share. |
| Marketed claims | Claims that can be bought and sold in financial markets, such as those of stockholders and bondholders. |
| Market-if-touched (MIT) | A price order, below market if a buy or above market if a sell, that automatically becomes a market order if the specified price is reached. |
| Market-on-Close (MOC) order | An order to tradestocks, options, or futures as close as possible to the market close. See also MOC. |
| Marketplace price efficiency | The degree to which the prices of assets reflect the available marketplace information. Marketplace price efficiency is sometimes estimated as the difficulty faced by management of earning a greater return than passive management would, after adjusting for the risk associated with a strategy and the transactions costs associated with implementing a strategy. |
| Marking to market | Settling or reconciling changes in the value of futures contracts on a daily basis. Also refers to the practice of reporting the value of assets on a market rather than book value basis. |
| Marking up or down | The amount by which a securitiesdealer raises or lowers the price of a stock or bond due to changes in demand and supply. |
| Markovian Dependence | The condition where observations in a time series are dependent on previous observations in the near term. Markovian dependence dies quickly, while long-memory effects like Hurst dependence, decay over very long time periods. |
| Markowitz diversification | A strategy that seeks to combine in a portfolioassets with returns that are less than perfectly positively correlated, in an effort to lower portfoliorisk (variance) without sacrificing return. Related: Naive diversification. |
| Markowitz efficient frontier | The graphical depiction of the Markowitz efficient set of portfolios representing the boundary of the set of feasible portfolios that have the maximum return for a given level of risk. Any portfolios above the frontier cannot be achieved. Any below the frontier are dominated by Markowitz efficient portfolios. |
| Markowitz efficient portfolio | Also called a mean-variance efficient portfolio, a portfolio that has the highest expected return at a given level of risk. |
| Markowitz efficient set of portfolios | The collection of all efficient portfolios, which can be graphed as the Markowitz efficient frontier. |
| Markowitz, Harry | Nobel laureate in economics. Father of portfolio theory. |
| Marks and Numbers | Identifying symbols and numbers placed by the shipper on each piece of cargo in a shipment. |
| Mark-to-market | Adjustment of the book value or collateral value of a security to reflect current market value. |
| Marriage penalty | A tax that has the effect of penalizing a married couple because they pay more tax on a joint tax return than they would if they file tax returns individually. |
| Married put | A put option bought at the same time as its underlying securities in order to hedge the price paid for the securities. |
| Married Put Strategy | A put and stock are considered to be married if they are bought on the same day, and the position is designated at that time as a hedge. |
| Marrried Put and Stock | The simultaneous purchase of stock and the corresponding number of put options. This is a limited riskstrategy during the life of the puts because the stock can be sold at the strike price of the puts. |
| Marshalling | The right of a second or subsequent mortgagee to require a mortgagee having priority to have recourse to assets charged only to the prior mortgagee before having recourse to assets charged to both mortgagees. |
| Master Air Waybill (MAB) | A document issued by the originating airline when and if a shipment involves more than one air carrier. |
| Master limited partnership (MLP) | A publicly traded limited partnership. |
| Master pension plan | See: Prototype plan |
| Matador market | The foreign market in Spain. |
| Matched and lost | The outcome of the flip of a coin used to determine which of two brokers who are locked in competition for equal trades may actually execute the trades. |
| Matched book | A bank runs a matched book when the of maturities of its assets and liabilities is distribution equal. |
| Matched maturities | The coordination by a financial_institution of the maturities of its assets (loans) and liabilities (deposits) in order to enable it to meet itsobligations at the required times. |
| Matched orders | Used for listed equity securities. Participate in equal amounts of a trade at a certain price, particularly when two parties have the same level of priority on the exchangefloor (this requires standing in the trading crowd). |
| Matched Sale Purchase Transactions | Transcations in which the Federal Reserve sells a government security to a dealer or a foregin central bank and agrees to buy back the security to a dealer or a foreign central bank and agrees to buy back the security on a specified date (usually within seven days) at eh same price (the reverse of a repurchase agreement). Such transaction allow the Federal Reserve to temporarily absorb excess reserves from the banking system, limiting the ability of banks to make new loans and investments. |
| Matched sale transaction | Applies mainly to convertible securities. Procedure whereby the Federal Reserve Bank of New York sells government securities to a nonbank dealer against payment in federal funds. The agreement requires the dealer to sell the securities back by a specified date, which ranges from 1 to 15 days. The Fed pays the dealer a rate of interest equal to the discount rate. These transactions, also called reverse repurchase agreements, decrease the money supply for temporary periods by reducing dealers' bank balances and thus excess reserves. |
| Match-fund | A bank is said to match-fund a loan or other asset when it does so by buying (taking) a deposit of the same maturity. The term is commonly used in the Euromarket. |
| Matching concept | The accounting principle that requires the recognition of all costs that are associated with the generation of the revenue reported in the income statement. |
| Material Adverse Change or Effect | Many mergers and acquisitions contracts include a material adverse change clause that allows a company to renegotiate or walk away from a deal if the other company or its subsidiaries announces a significant event that may negatively affect its stock price or operations. See also materiality. |
| Materiality | The importance of an event or information in influencing a company'sstock price. Companies must report any material events within one month by filing SEC form 8-K. |
| Materials requirement planning | Computer-based systems that plan backward from the production schedule to make purchases in order to manage inventory levels. |
| Mathematical programming | An operations research technique that solves problems in which an optimal value is sought subject to specified constraints. Mathematical programming models include linear programming, quadratic programming, and dynamic programming. |
| Matif SA | The futuresexchange of France. |
| Matrix trading | Swappingbonds in order to take advantage of temporary differences in the yield spread between bonds with different ratings or different classes. |
| Mature | To cease to exist; to expire. |
| Mature economy | The economy of a nation with a stable population and slowing economic growth. |
| Matured noninterest-bearing debt | Outstanding savings bonds and notes that have reached final maturity and no longer earn interest. Includes all Series A-D, F, G, 1, J, and K bonds. Series E bonds (issued between May 1941 and November 1965), Series EE (issued since January 1980), Series H (issued from June 1952 through December 1979), and savings notes issued between May 1967 and October 1970 have a final maturity of 30 years. Series HH bonds (issued since January 1980) mature after 20 years. |
| Maturity | For a bond, the date on which the principal is required to be repaid. In an interest rate swap, the date that the swap stops accruing interest. |
| Maturity date | Usually used for bonds. Date that the bond finishes and is paid off. Date on which the principal amount of a note, draft, acceptance, bond, or other debt instrument becomes due and payable. |
| Maturity factoring | An arrangement that provides collection and insurance of accounts receivable. |
| Maturity phase | A stage of company development in which earnings to grow at the rate of the general economy. Related: Three-phase DDM. |
| Maturity spread | The difference in returns between bonds of different time lengths. |
| Maturity value | Related: Par value |
| Maximum capital gains mutual fund | A mutual fund whose objective is to produce capital gains by investing in small or risky rapid-growth companies. |
| Maximum expected return criterion (MERC) | Standard that one choose the asset with the highest anticipated return. |
| Maximum price fluctuation | The greatest amount by which the contract price can change, up or down, during one trading session, as fixed by exchange rules in the contract specification. Related: Limit price. |
| Maximum return criterion (MRC) | Standard that one choose the asset with the highest return. |
| May Day | The date of May 1, 1975, after which brokers were allowed to charge any brokerage commission, rather than a mandatory rate. |
| May expand | Used in the context of general equities. Warning that the size of the order/total may be increased. See: "more behind it." |
| MBO | See: Management buyout |
| MBS depository | A book-entry depository for GNMAsecurities. The depository was initially operated by MBSCC and is now a separately incorporated, participant-owned, limited-purpose trust company organized under the State of New York Banking Law. |
| MBS servicing | The requirement that the mortgage servicer maintain payment of the full amount of contractually due principal and interest payments whether or not actually collected. |
| MBSCC | See: Mortgage-Backed Securities Clearing Corporation |
| MC | The two-character ISO 3166 country code for MONACO. |
| MD | The two-character ISO 3166 country code for MOLDOVA, REPUBLIC OF. |
| MDA | See: Multiple discriminant analysis |
| MDL | The ISO 4217 currency code for the Moldovan Leu. |
| Meals and entertainment expense | A tax deduction allowed for meals and entertainment expenses incurred in the course of business. |
| Mean | The expected value of a random variable. Arithmetic average of a sample. |
| Mean of the sample | The arithmetic average; that is, the sum of the observations divided by the number of observations. |
| Mean return | See: Expected return |
| Mean-variance analysis | Evaluation of risky prospects based on the expected value and variance of possible outcomes. |
| Mean-variance criterion | The selection of portfolios based on the means and variances of their returns. The choice of the higher expected returnportfolio for a given level of variance or the lower variance portfolio for a given expected return. |
| Mean-variance efficient portfolio | Related: Markowitz efficient portfolio |
| Measurement error | Errors in measuring an explanatory variable in a regression, which leads to biases in estimated parameters. |
| Measurement Noise | See: Observational Noise. |
| Medallion Stamp Program | A program approved by the Securities Transfer Association that enables participating financial_institutions to guarantee signatures. The Medallion programs ensure that the individual signing the certificate or stock, power is in fact the registered owner as it appears on the stock certificate or stock power. Any U.S. financial institution that belongs to a Medallion Stamp Program can provide Medallion guarantees. Such institutions include banks, savings and loans, credit unions and U.S. brokerages. |
| Median market cap | The midpoint of market capitalization (market price multiplied by the number of sharesoutstanding) of the stocks in a portfolio. Half the stocks in the portfolio will have higher market capitalizations; half will have lower. |
| Medium term | Two-six years. |
| Medium-term bond | A bondmaturing in two to ten years. |
| Medium-Term Guarantee Program | Ex-Im Bank effort encouraging commercial lenders to finance the sale of U.S. capital equipment and services to approved foreign buyers. The Ex-IM Bank guarantees the principal and interest on these loans. |
| Medium-term note (MTN) | A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc., up to 30 years. |
| Medium-term note retail (MTNR) | Medium-term note designated for retail investors. For example, at Fannie Mae, it means that the bond is designated for individual investors that is underwritten through a dealer versus issuing through a program, like Investment Notes or Benchmark Notes. |
| Meff Renta Fija | The derivativesexchange in Barcelona, Spain, listing futures and options on fixed-interest securities and on interest rates, including the MIBOR (Madrid Interbank Offered Rate). |
| Meff Renta Variable | Stockindex and equity derivatives market in Spain tradingfutures and options on the Iberian Exchange (IBEX)-35 index and on individual stocks. |
| Member bank | A national- or state-chartered bank that is a member of the Federal Reserve System. |
| Member firm | Used for listed equity securities. Brokerage firm that has at least one membership on a major stock exchange even though, by exchange rules, the membership in the name of an employee and not of the firm itself. |
| Member short sale ratio | The total shares sold short by NYSE members divided by total short sales, which is used to analyze market expectations and bullish or bearishtrends. |
| Member short sale ratio | The total shares sold short by NYSE members divided by total short sales, which is used to analyze market expectations and bullish or bearishtrends. |
| Membership or a seat on the exchange | A limited number of exchangepositions that enable the holder to trade for the holder's own accounts and charge clients for the execution of trades for their accounts. Related: member firm. |
| Menu | Used in the context of general equities. Hierarchy of choices concerning price and volume of bids or offers proposed to a customer (e.g. Menu of offerings to a customer buyer - a) 10m @ 24 1/4; b) 25m @ 24 1/2; or c) 50m @ 24 3/4). |
| Merc, the | Chicago Mercantile Exchange. |
| Mercantile agency | An organization that supplies credit ratings and reports on firms that are prospective customers. |
| Mercato Italiano Futures (MIF) | The Italian futures market trading Italian Treasury bond (BTB) futures. |
| Merchandise | All movable goods such as cars, textiles, appliances, etc. and 'f.o.b.' means free on board. |
| Merchant bank | A British term for a bank that specializes not in lending out its own funds, but in providing various financial services such as accepting bills arising out of trade, underwriting new issues, and providing advice on acquisitions, mergers, foreign exchange, portfolio management, etc. |
| Mercosur | The "Common Market of the South," which includes Argentina, Brazil, Paraguay, and Uruguay in a regional trade pact that reduces tariffs on intrapact trade by up to 90%. |
| Merger | (1) Acquisition in which all assets and liabilities are absorbed by the buyer. (2) More generally, any combination of two companies. The firm's activity in this respect is sometimes called M&A (Merger and Acquisition) |
| Merger Arbitrage | In the context of hedge funds, a style of management that involves the simultaneous purchase of stock in a company being acquired and the sale of stock in its acquirer. |
| Method of payment | The way a merger or acquisition is financed. |
| Mexican Stock Exchange | The only stock exchange in Mexico. The Indice de Precios y Cotizaciones, or IPC index, consists of the 35 most representative stocks chosen every two months. |
| Mezzanine bracket | The members of an underwriting group with involvement large enough to be in the second participation tier from the top. |
| Mezzanine debt | The portion of a loan that exceeds the amount a lender would normally advance. So if a loan is 90% of the value of a property and the lender’s usual criterion allows for 80% loan to value lending, the extra 10% is mezzanine debt. This may be provided by another lender. The margin is usually higher than for senior debt. |
| Mezzanine financing | The next stage of financing that follows venture capital financing. |
| Mezzanine level | The period in a company's development just before it goes public. |
| MG | The two-character ISO 3166 country code for MADAGASCAR. |
| MGF | The ISO 4217 currency code for the Madagascar Franc. |
| MH | The two-character ISO 3166 country code for MARSHALL ISLANDS. |
| MHS | See: Manufactured housing securities |
| Micro country risks | Country or political risks that are specific to an industry, company, or project within a host country. |
| Microassessment | The risk assessment of a country as related to an MNC's type of business. |