sohomghosh/FinRAD_Financial_Readability_Assessment_Dataset

terms stringlengths 1 156	definitions stringlengths 3 4.2k	source stringclasses 15 values	flesch_reading_ease float64 -301.79 121	flesch_kincaid_grade float64 -3.5 55.6	smog_index float64 0 26.5	coleman_liau_index float64 -33.81 51.4	automated_readability_index float64 -6.9 65	dale_chall_readability_score float64 0.1 35.3	linsear_write_formula float64 -0.5 73	gunning_fog float64 0.4 56
LOSSES OUTSTANDING	In INSURANCE, the amount of losses represent- ing CLAIMS received but not yet paid by the INSURER to INSUREDS. See alsoLOSSES INCURRED.	palgrave	68.77	6.4	0	10.54	8.5	11.36	6.5	11.67
LOT	A minimum standard tradable quantity of a SECURITY, COMMODITY, or ASSET, typically set by an EXCHANGE or established through market convention. See also BOARD , ODD , ROUND .	palgrave	24.44	13.1	0	12.86	11.5	10.35	10.75	15.97
LP	See LIMITED PARTNERSHIP.	palgrave	9.21	12.7	0	15.03	14.6	14.31	2.5	27.87
LSE	See LONDON STOCK EXCHANGE.	palgrave	75.88	3.7	0	8.7	7.7	7.78	1	1.6
LTD	See LIMITED.	palgrave	35.61	8.8	0	-1.61	5.5	11.63	1	20.8
LTPR	See LONG-TERM PRIME RATE.	palgrave	118.18	-2.3	0	5.8	6.5	7.78	1	1.6
LTV	See LOAN-TO-VALUE.	palgrave	-6.7	14.7	0	10	19.6	0.1	1	0.8
M&A	Abbreviated form of MERGERS and ACQUISITIONS.	palgrave	6.17	13.9	0	16.87	13	11.83	4	15.73
M0	CURRENCY in circulation plus BANK balances at the CENTRAL BANK.	palgrave	52.87	8.4	0	11.98	9	12.03	6	12
MAASTRICHT TREATY	A treaty, signed in 1992 in Maastricht, Netherlands, that led to the creation of the EUROPEAN UNION. The treaty defined the development and timeline for EUROPEAN MONETARY UNION and the cre- ation of a single currency, the EURO.	palgrave	60.65	9.5	0	10.68	11.6	11.23	12	11.81
MAC	See MATERIAL ADVERSE CHANGE CLAUSE.	palgrave	49.48	7.6	0	13.08	10.3	13.36	2.5	10
MACARONI DEFENSE	An ANTITAKEOVER DEFENSE where a poten- tial TARGET company issues BONDS with a REDEMPTION clause forcing the SECURITIES to be redeemed at a very substantial PREMIUM to PAR VALUE in the event of a TAKEOVER; the provision makes the company unattractive to any potential acquirer. See also SCORCHED EARTH DEFENSES.	palgrave	46.1	13	0	12.94	15.8	12.14	18	17.2
MACROECONOMICS	The study, within the broad area of ECONOMICS, of the total economic activity of a system, with a focus on NATIONAL INCOME, industrial production, INFLATION/prices, UNEMPLOYMENT, MONEY SUPPLY, INTEREST RATES, and FOREIGN EXCHANGE RATES. See alsoMICROECONOMICS.	palgrave	1.1	22.1	0	17.65	26	13.76	28	25.51
MACROHEDGE	A proxy HEDGE, put in place by a company or BANK, that is designed to protect REVENUES and earnings in the event of a deterioration in economic conditions (upto, and including, a RECESSION). Since there is no single instrument or financial CONTRACT that can replicate such conditions,a macrohedge is generally constructed from a variety of UNDERLYINGS that perform well in poor market conditions.	palgrave	31.04	16.8	0	13.24	19.3	10.71	22.75	19.58
MAIN STREET	n the United States, the broad class of RETAIL INVESTORS.	palgrave	86.71	3.7	0	7.92	6.2	8.87	4	4
MAINTENANCE PERIOD	A specified period for computing BANK compli- ance with relevant RESERVE requirements.	palgrave	17	13.9	0	17.1	14	14.76	11	21.47
MAJORITY CONTROL	A process or structure where effective corporate con-trol is gained by taking a majority, though not absolute, stake in the company’sCOMMON STOCK. See also CONTROLLING INTEREST, LEGAL MECHANISMCONTROL, MANAGEMENT CONTROL, MINORITY CONTROL, TOTALCONTROL, VOTING TRUST CONTROL.	palgrave	10.91	16.2	0	19.49	19	13.3	14.5	19.42
MAJORITY INTEREST	See CONTROLLING INTEREST.	palgrave	9.21	12.7	0	16.95	16.2	14.31	2.5	27.87
MAKING A BOOK	In the United Kingdom, taking a LONG POSITIONor SHORT POSITION in SECURITIES, COMMODITIES, or other ASSETS forproprietary, rather than client-driven, purposes. Such activity is typical forthe proprietary TRADING desks at BANKS and SECURITIES FIRMS, as well asHEDGE FUNDS. See also BACK BOOK.	palgrave	40.35	11.1	14.1	15.25	13.6	11.1	10.666667	14.17
MAKING A MARKET	See TWO-WAY PRICES.DEBT OBLIGATION (CDO) that permits the manager to substitute REFERENCECREDITS in the POOL. This form of CDO allows the substitution of deteriorat-ing credits, but does not provide INVESTORS with transparency on the compos-ition of the PORTFOLIO and carries higher fees than STATIC COLLATERALIZEDDEBT OBLIGATIONS. See also SINGLE TRANCHE COLLATERALIZED DEBTOBLIGATION, SYNTHETIC COLLATERALIZED DEBT OBLIGATION.	palgrave	18.65	15.3	16.3	20.19	19.3	12.46	14.666667	16.05
MANAGED FLOATING	See MANAGED FOREIGN EXCHANGE RATE.whose value is set by a CENTRAL BANK or monetary authority via small/regu-lar purchases and sales of CURRENCY and through macroeconomic policies.Managed rates are not strictly fixed or pegged by government authorities, norare they freely determined through pure market SUPPLY and DEMAND forces.Also known as MANAGED FLOATING. See also CRAWLING PEG, PEGGING.	palgrave	26.14	16.6	0	16.89	20.8	12.64	19.5	16.2
MANAGED FUND	Any form of INVESTMENT FUND (e.g., MUTUAL FUND, UNIT INVESTMENT TRUST) that features active management by the FUND MANAGER, who typically has significant discretion regarding the nature and timing of ASSETS that can be bought and sold within the fund (but must in all cases adhere to the terms of an approved investment policy).	palgrave	16.67	24.4	0	12.09	29.5	12.75	38	27.53
MANAGEMENT CAPITAL	See ECONOMIC CAPITAL.	palgrave	9.21	12.7	0	9.23	9.9	9.05	2.5	14.53
MANAGEMENT COMPANY	The primary company of a MUTUAL FUND or other FUND MANAGEMENT organization, responsible for managing all aspects of the support, infrastructure, and policy surrounding an entire group of associated funds.	palgrave	-1.28	20.9	0	16.37	21	13.02	26	25.33
MANAGEMENT CONTROL	A process or structure where management gains effective corporate control by accumulating a sufficiently large blockof a company’s COMMON STOCK to direct activities; as with MINORITY CONTROL, this process only works when ownership is so diffuse that even an organized MINORITY INTEREST fails to dominate the company and its actions. See also LEGAL MECHANISM CONTROL, MAJORITY CONTROL, TOTAL CONTROL, VOTING TRUST CONTROL.	palgrave	14.63	18.9	0	16.31	21.4	12.05	23.5	21.43
MANDATE	An authorization or approval to arrange a NEW ISSUE of SECURITIES or CORPORATE FINANCE transaction, awarded by a company or sovereign entity to a FINANCIAL INSTITUTION acting as an INTERMEDIARY. COMMERCIAL BANKS, INVESTMENT BANKS, and SECURITIES FIRMS that hope to generate fee income and gain LEAGUE TABLE credit compete aggres- sively for mandates.	palgrave	19.2	17.2	0	14.97	18.3	12.7	20.25	19.66
MANDATORY BID	In the United Kingdom, a requirement under the CITY CODE stipulating that an acquiring company must submit a formal BID for a TAKEOVER target once it has amassed 30% of the target’s SHARES in the market.	palgrave	43.4	16.2	0	9.88	18.6	10.69	22	17.73
MANUSCRIPT INSURANCE	A customized INSURANCE POLICY with terms that are tailored to an INSURED’s specific requirements. A manu- script contract, which is used when coverage cannot be accommodated via a standard insurance form, reflects special needs, conditions, and PERIL coverages. Also know as MANUSCRIPT POLICY.	palgrave	40.04	11.2	14.6	14.9	13.2	12.42	11.166667	15.02
MANUSCRIPT POLICY	See MANUSCRIPT INSURANCE.	palgrave	9.21	12.7	0	16.95	16.2	14.31	2.5	27.87
MAPLE BOND	A BOND, NOTE, or CERTIFICATE OF DEPOSIT issued in Canadian dollars in the Canadian markets by a foreign company.NONPURPOSE LOAN, PURPOSE LOAN.	palgrave	40.69	13.1	0	13.29	15.5	11.19	15	14.25
MARGIN CALL	A CALL made by a BANK, BROKER, or other FINANCIAL INSTITUTION to an INVESTOR holding a MARGIN LOAN in a MARGIN ACCOUNT when the MAINTENANCE MARGIN has declined below a specified threshold. The investor must supply additional VARIATION MARGIN to return to the specified MAINTENANCE MARGIN or risk a closeout of its position.	palgrave	36.12	14.8	0	12.25	15.9	9.72	17.75	15.88
MARGIN LOAN	See PURPOSE LOAN.	palgrave	93.81	0.9	0	1.52	3.6	9.05	0.5	1.2
MARGIN TRADING	A form of LEVERAGED TRADING arising when an INVESTOR secures a MARGIN LOAN through a MARGIN ACCOUNT.	palgrave	62.68	8.7	0	10.73	10.3	10.05	7.5	6.8
MARGINAL COST	The change in TOTAL COST that comes from producing an incremental unit of a good or service. Marginal cost can change at each new level of production, so the marginal cost at any point relates to the change in cost for that unit. It is computed as the first derivative of total cost with respect to quantity, or:where MC stands for marginal cost, TC for total cost and Q for quantity. See also MARGINAL REVENUE, VARIABLE COST.	palgrave	60.35	9.6	12.6	8.41	9.6	8.28	12.375	11.36
MARGINAL REVENUE	The change in REVENUE that comes from selling an incremental unit of a good or service. Marginal revenue can change at each new level of sales, so the marginal revenue at any point relates to the change in revenue for that unit. It is computed as the first derivative of total revenue (TR) with respect to quantity (Q), or:= ∂TR∂QSince revenue is itself a function of price times quantity, MR can also be expressed as the first derivative of price (P) with respect to quantity, or:See also MARGINAL COST.	palgrave	49.79	13.7	13.6	9.35	15.4	9.01	18.166667	14.13
MARGINAL TAX RATE	The incremental TAX levied for an additional unit of INCOME (or earnings), computed as the change in tax liability (due or paid) divided by the change in taxable income (earnings). See also AVERAGE TAX RATE, EFFECTIVE TAX RATE, STATUTORY TAX RATE.	palgrave	50.67	11.3	0	10.44	12.6	9.27	14.25	16
MARINE INSURANCE	A general form of PROPERTY AND CASUALTY INSURANCE used to cover goods in transit (i.e., via air, land, or waterway) and the vehicles used for transportation.	palgrave	36.63	14.6	0	10.68	15.5	10.39	20	19.63
MARKER CRUDE	A BENCHMARK reference crude oil that is used in pricing and TRADING. Different qualities of oil from different regions may be pegged to particular marker crudes, such as Brent Blend, West Texas Intermediate, Dubai, and so forth.	palgrave	61.16	9.3	0	11.89	12.3	11.38	12.25	11.72
MARKET CAPITALIZATION	A measure of a PUBLIC COMPANY’s current value, computed as:MC = S × Shswhere S is the current price of the COMMON STOCK and Shs is the number ofOUTSTANDING SHARES.Since the stock price changes on a daily basis, the market capitalization of the firm changes in tandem. Also known as MARKET VALUE.	palgrave	54.05	12.1	0	9.99	13.8	9.86	15.5	13.34
MARKET DEPTH	The number of SHARES of STOCK in a given company that are BID and OFFERED, ranked by price. Market depth contributes to the DISPLAYED LIQUIDITY that all INVESTORS can see.	palgrave	73.17	6.8	0	8.98	8.3	8.59	8	8.67
MARKET ECONOMY	See FREE .	palgrave	77.91	2.9	0	-10.31	-1.7	0.1	0.5	0.8
MARKET FLEX	Legal language contained in a LOAN transaction that allows the ARRANGER to change pricing based on INVESTOR demand, itself a func- tion of market conditions. Market flex also allows the arranger to reallocate portions of the loan across various TRANCHES.	palgrave	51.18	11.1	0	13.34	13.9	11.34	12	12
MARKET IF TOUCHED ORDER	An ORDER to purchase or sell a SECURITY if a particular price is reached; once attained, the order converts into a MARKET ORDER and is filled at the best available market price.	palgrave	47.46	14.6	0	9.24	16	9.17	18	15.3
MARKET IMPACT	The effect of information transfer from an ORDER on the market price of a quoted SECURITY.	palgrave	46.78	10.7	0	9.28	8.7	9.36	9	11.4
MARKET MICROSTRUCTURE	The study of the specific mechanics of finan- cial marketplaces, focusing particularly on the way in which SUPPLY and DEMAND interact and the way in which PRICE DISCOVERY is achieved.	palgrave	41.03	15	0	12.49	17.7	11.44	22	21.33
MARKET MODEL	A general corporate system that is characterized by very diffuse SHAREHOLDINGS, deep and LIQUID CAPITAL MARKETS, dynamic CAPITAL reallocation, advanced legal and regulatory frameworks, and an active CORPORATE CONTROL MARKET. The United States, the United Kingdom, and Canada are representative examples of the market model. See also HYBRID MODEL, RELATIONSHIP MODEL.	palgrave	11.92	15.8	15	17.22	16.3	10.98	12.833333	13.86
MARKET NEUTRAL	A common HEDGE FUND or INVESTMENT strategy where a manager creates a PORTFOLIO of LONG and SHORT positions in an EQUITY market. The construction of a market neutral portfolio allows the manager to simultaneously express views on stocks believed to be undervalued and those that are overvalued. A market neutral portfolio can result in theelimination of SYSTEMATIC RISK in favor of IDIOSYNCRATIC RISK arising from individual long and short positions. See also LONG ONLY.	palgrave	35.78	12.9	15.2	13.46	13	10.1	13.75	14.43
MARKET ON CLOSE ORDER	An ORDER to purchase or sell a SECURITY at the price prevailing at market close. The market on close is effectively equiva- lent to a delayed MARKET ORDER.	palgrave	57.27	8.8	0	8	7.1	8.28	7.5	9.89
MARKET ORDER	An ORDER for the purchase or sale of a SECURITY at the current market level; as long as sufficient LIQUIDITY is available, the order will be filled at the market price. See also LIMIT ORDER, MARKET IF TOUCHED ORDER, MARKET ON CLOSE ORDER, STOP ORDER, TIME ORDER.	palgrave	56.08	11.3	0	8.71	12	7.83	13.25	11.95
MARKET OUT CLAUSE	See MATERIAL ADVERSE CHANGE CLAUSE.	palgrave	49.48	7.6	0	13.08	10.3	13.36	2.5	10
MARKET POWER	A situation where a purchaser or supplier of raw materials or finished goods has such a significant presence that it can dictate, to a signifi- cant degree, favorable pricing terms. Such power is limited to a small number of companies that effectively operate as MONOPOLIES or OLIGOPOLIES.	palgrave	30.7	14.8	0	12.36	14.7	11.52	17.75	19.61
MARKET PRICE	(1) The price for a good or service that is determined through the interaction of SUPPLY and DEMAND in a free market setting. (2) An EXECUTION price on an ORDER that reflects the current market BID or market OFFER. (2) See also LIMIT PRICE.	palgrave	35.28	19.3	0	8.37	21.7	9.41	25	20.33
MARKET RISK	The RISK of loss due to an adverse move in the MARKET VALUE of an ASSET or market indicator, such as a COMMON STOCK, BOND, LOAN, FOREIGN EXCHANGE RATE, or COMMODITY. Market risk, which is a form of FINANCIAL RISK, can be subcategorized into BASIS RISK, CURVE RISK, DIRECTIONAL RISK, SPREAD RISK, and VOLATILITY RISK.	palgrave	52.02	12.8	0	9.29	14.7	8.73	16.75	15.36
MARKET RISK AMENDMENT	An amendment to the BASLE ACCORD framework, agreed in 1996, permitting participating BANKS to use their internal models in the computation of VALUE-AT-RISK for CAPITAL ALLOCATION purposes. See also BASLE II.	palgrave	38.82	11.7	0	14.44	13.2	12.55	11.25	13.94
MARKET SEGMENTATION THEORY	A theory of INTEREST RATES indicat- ing that each MATURITY segment of the YIELD CURVE is separate and dis- tinct; INVESTORS commit CAPITAL to the sector of their choice, impeding the free flow of capital to other segments. See also EXPECTATIONS THEORY, LIQUIDITY PREFERENCE THEORY.Additional references: Lutz and Lutz (1951); Meiselman (1962).	palgrave	28.17	15.8	0	14.05	18	12.21	20	18.09
MARKET SWEEP	A second offer for the purchase of outstanding SHARES of COMMON STOCK, made by an acquiring company to INVESTORS in the TARGET company. The market sweep, which comes after an initial TENDER OFFER has been made, is intended to build the acquirer’s position to a con- trolling stake and may be executed at a price that is higher than the initial tender.	palgrave	48.47	14.2	0	9.88	16.1	9.76	19.5	16.27
MARKET TIMING	An INVESTMENT strategy used by certain FUND MANAGERS and proprietary TRADING operations that attempts to select the proper points through which to establish a LONG POSITION or SHORT POSITION in a particular ASSET. In reality such a strategy is difficult to imple- ment consistently.	palgrave	32.22	14.2	0	13.81	15.1	11.19	17	17.89
MARKET VALUE	(1) The current value of an ASSET or LIABILITY based on quoted BIDS or OFFERS, reflecting a realizable economic value in the market- place. (2) See MARKET CAPITALIZATION. (1) See also BOOK VALUE.	palgrave	21.06	18.5	0	10.05	18.3	11.49	21.5	19.26
MARKET VALUE ADDED	A measure of a company’s financial performance that compares its MARKET VALUE with CAPITAL invested. The greater the mar- ket value added, the greater the company’s ability to use its capital resources effectively. See also ACCOUNTING PROFIT, ECONOMIC PROFIT, ECONOMIC VALUE ADDED.	palgrave	40.35	11.1	14.6	14.32	12.5	9.97	11	13.22
MARKETABLE SECURITY	Any SECURITY that can be sold without limita- tion in a SECONDARY MARKET, thus featuring a high degree of LIQUIDITY. While many securities can be freely traded and are thus marketable some, such as PRIVATE PLACEMENTS, are designed primarily as “hold to maturity” ASSETS and are more accurately considered NONMARKETABLE SECURITIES. Certain ILLIQUID assets, such as MORTGAGES, LOANS, and ACCOUNTS RECEIVABLE, can be converted into marketable securities via the SECURITIZATION process.	palgrave	30.5	14.9	15.5	15.79	17.7	11.48	16.5	16.24
MARKOV PROCESS	A STOCHASTIC PROCESS where only the current price of an ASSET is relevant in determining what may happen in the future, i.e., previous prices and the number of periods preceding the current observation are irrele- vant. The Markov process is used in numerous DERIVATIVE pricing models.MULTIPERIOD PORTFOLIO OPTIMIZATION.	palgrave	30.2	15	0	15.03	17.4	12.39	18	19.6
MARRIED PUT	A PUT OPTION that is acquired by an INVESTOR as a HEDGE at the same time as the UNDERLYING reference ASSET is purchased. As the price of the underlying asset declines the value of married put increases, and vice versa.	palgrave	59.64	9.9	0	8.24	9.6	9.37	12	11
MAS	See MONETARY AUTHORITY OF SINGAPORE.	palgrave	-1.29	14.7	0	14.24	11.2	13.36	4.5	26
MASTER FUND	A FUND that invests CAPITAL gathered from INVESTORS through one or more FEEDER FUNDS. The master fund structure is widely employed in the HEDGE FUND sector.	palgrave	75.2	6	0	10.6	8.8	10.96	6	5.2
MASTER LIMITED PARTNERSHIP (MLP)	A form of organization where the legal structure mirrors a conventional LIMITED PARTNERSHIP but where the business structure assumes that of a CORPORATION. An MLP may be publicly traded on an EXCHANGE.	palgrave	46.78	10.7	0	12.87	11.6	10.35	10.5	12.65
MASTER NOTE	COMMERCIAL PAPER offered by a direct ISSUER to the INVESTMENT management or TRUST department of a BANK or an INSTITUTIONAL INVESTOR that has periodic amounts to invest in short- term FIXED INCOME instruments. The master note, which pays a particular SPREAD above a stated commercial paper rate, is a dependable source of funds for the issuer and eliminates the administrative burden that would otherwise arise through the issuance of smaller denomination notes.	palgrave	26.48	18.5	0	14.34	22.1	11.12	25	21.07
MASTER TRUST	A vehicle often used to hold a POOL of ASSETS securing anASSET-BACKED SECURITY.	palgrave	41.36	10.7	0	10.83	9.3	11.57	10.5	14.43
MATCH	The process of matching a buyer and seller of an ASSET, typically STOCK. See also CROSS, CROSSING NETWORK, DARK POOL.	palgrave	69.79	6	0	8.21	6.6	9.66	4.5	6
MATCHED BARGAIN	In the United Kingdom, the pairing of an ORDER to buy and an order to sell a specific STOCK.	palgrave	69.11	8.3	0	4.7	6.4	6.24	10.5	9.71
MATCHED BOOK	A PORTFOLIO of ASSETS and LIABILITIES (such as the LOANS and DEPOSITS of a BANK, or the REPURCHASE AGREEMENTS and REVERSE REPURCHASE AGREEMENTS of a SECURITIES FIRM), with equal (or nearly equal) MATURITIES or DURATIONS. A matched book minimizes or eliminates an institution’s exposure to MARKET RISK and/or LIQUIDITY RISK, but generates a smaller RETURN on CAPITAL. See also GAP, GAPPING, MISMATCH, OPEN BOOK, UN.	palgrave	40.99	12.9	15.5	12.59	14.7	10.79	15.5	16.06
MATCHING CONCEPT	A central ACCOUNTING CONCEPT that indicates a company should properly match its INCOME with its EXPENSES in any given accounting period (e.g., on an ACCRUAL BASIS). See also CONSISTENCY CONCEPT, GOING CONCERN CONCEPT, PRUDENCE CONCEPT.	palgrave	28.33	13.7	0	14.27	14.4	10.82	13.25	15
MATERIALITY	An assessment of information classified as material, and which must be considered in the ACCOUNTING process and in any relevant financial disclosure. Though the classification of materiality is at least partly subjective, a general guideline suggests that the exclusion of material informa- tion may have an adverse effect on STAKEHOLDERS.	palgrave	20.72	16.6	0	16.08	18.4	11.51	21	22
MATILDA	A BOND, NOTE, or CERTIFICATE OF DEPOSIT issued in Australian dollars in the Australian markets by a foreign company.	palgrave	52.19	10.7	0	11.72	12.4	10.4	11.5	9.71
MATURITY	See DATE.	palgrave	77.91	2.9	0	-10.31	-1.7	0.1	0	0.8
MATURITY BUCKET	A framework of time bands used by BANKS and other FINANCIAL INSTITUTIONS to manage their ASSETS and LIABILITIES, <1 year, 1–3 years, 3–5 years, 5–7 years, and so forth. Assets and liabilities are assigned to their respective buckets and then used to compute a GAP.	palgrave	57.1	10.9	0	10.33	12.9	11.07	13.75	12.56
MATURITY DATE	The date on which a financial CONTRACT, ASSET, or LIABILITY matures or comes due. Also known as MATURITY. See also EXPIRY DATE, REDEMPTION DATE.	palgrave	54.9	7.6	9.7	8.13	6.3	9.95	4.333333	9.87
MAXIMUM FORESEEABLE LOSS	A worst-case loss scenario applied by an INSURER or REINSURER to a potential CATASTROPHIC HAZARD. See alsoMAXIMUM PROBABLE LOSS.	palgrave	36.45	10.5	0	13.6	10.6	11.59	6.75	16.43
MAXIMUM LOSS	A loss measure indicating the amount a firm might lose across a PORTFOLIO of MARKET RISKS by ignoring any offsetting effects obtained from DIVERSIFICATION. Maximum loss can be regarded as an extreme form of the VALUE-AT-RISK computation. See also SCENARIO ANALYSIS.	palgrave	40.65	11	13	13.27	11.3	10.48	8.833333	14.26
MAXIMUM PROBABLE LOSS	An EXPECTED LOSS computation applied by an INSURER or REINSURER to a catastrophic or noncatastrophic RISK event. See also AMOUNT AT RISK, MAXIMUM FORESEEABLE LOSS.	palgrave	41.87	10.5	0	13.38	11	11.2	10.25	17.8
MBO	See MANAGEMENT BUYOUT.	palgrave	34.59	9.2	0	11.15	11.5	14.31	1.5	14.53
MBS	See MORTGAGE-BACKED SECURITY.	palgrave	-24.64	17.4	0	22.75	22.5	19.58	2.5	14.53
MEAN	The unweighted average of a set of observations, which can be com- puted in arithmetic or geometric form:Arithmetic mean:Geometric mean:m= (Πi xi )Nwhere xi is an observation and N is the number of observations. See alsoMEDIAN, MODE.	palgrave	35.78	12.9	0	11.89	12.9	10.53	13.75	13.89
MEAN REVERSION	The observable tendency for INTEREST RATES, EQUITIES, and certain other financial variables to return to a MEAN level over the long term. Mean reversion is incorporated into certain DERIVATIVE pricing models.	palgrave	30.36	12.9	0	14.96	13.4	10.52	11.75	16.52
MEAN VARIANCE ANALYSIS	The process of evaluating the riskiness of a PORTFOLIO based on the EXPECTED RETURN and RISK (or VARIANCE) of potential outcomes. A portfolio can be optimized for single or multiple frame- works through this process. Also known as MEAN VARIANCE OPTIMIZATION. See also MARKOWITZ PORTFOLIO OPTIMIZATION, MODERN PORTFOLIO THEORY, MULTIPERIOD PORTFOLIO OPTIMIZATION.Additional reference: Markowitz (1952).	palgrave	32.09	12.2	14.9	17.33	15.2	10.35	11.125	14.25
MEDIAN	A form of obtaining an average figure, typically obtained by order- ing the values from largest to smallest and then selecting the center value (when the number of observations is odd) or the average of the two center values (when the number of observations is even). See also MEAN, MODE.	palgrave	46.1	13	0	9.7	13.6	8.35	16	14
MEDIUM OF EXCHANGE	A mechanism (often with little INTRINSIC VALUE) to store and transfer value, allowing for the efficient payment of goods and services. While all manner of COMMODITIES have historically been used as a medium of exchange, money is now the most common form. See alsoBANKNOTE, FIAT MONEY.	palgrave	47.49	10.4	11.9	11.24	10.7	8.86	9	12.21
MEDIUM-TERM DEBT	Any form of DEBT with a MATURITY DATE of 1 to 10 years, depending on jurisdiction or ACCOUNTING rules. See also LONG-TERM DEBT, SHORT-TERM DEBT.LONDON INTERBANK OFFERED RATE, COMMERCIAL PAPER, TREASURY BILLS, or the PRIME RATE. See also EURO MEDIUM-TERM NOTE (EMTN).	palgrave	57.27	8.8	11.9	11.24	10.8	11.47	8.333333	11.31
MEMBER BANK	A BANK that is officially part of a country’s CENTRAL BANK or monetary authority system, or part of a national CLEARING system.	palgrave	40.69	13.1	0	10.15	12.3	10.47	15	16.07
MEMORANDUM OF ASSOCIATION	In the United Kingdom, a document that presents essential information on a new company that seeks to be rec- ognized as a REGISTERED COMPANY. The memorandum is filed with the Registrar of Companies.	palgrave	46.27	10.9	0	10.9	10.5	10.2	12.75	15.08
MERCHANT BANK	In the United Kingdom, a BANK that provides clients with CORPORATE FINANCE, RISK MANAGEMENT, and INVESTMENT man- agement advice, and deals actively in SECURITIES UNDERWRITING and TRADING and PRIVATE EQUITY investments. A merchant bank does not actively accept DEPOSITS or grant LOANS as a main line of business. See alsoBOUTIQUE, INVESTMENT BANK.	palgrave	45.46	11.2	14.1	14.32	13.9	11.48	12.333333	13.84
MERGER ACCOUNTING	The ACCOUNTING policies used when two companies arrange a MERGER as equals. Under this process the BALANCE SHEET accounts of the two companies are simply added together, and no changes to GOODWILL are affected. Also known as POOLING OF INTERESTS ACCOUNTING. See also ACQUISITION ACCOUNTING.	palgrave	51.55	8.9	11.7	12.62	10	9.81	6.875	8.96
MERGER ARBITRAGE	See RISK ARBITRAGE.	palgrave	59.97	5.6	0	5.35	6.8	14.31	1.5	14.53
METI	See MINISTRY OF ECONOMY, TRADE, AND INDUSTRY.	palgrave	55.91	7.2	0	9.87	8.3	10.75	4.5	14.23
MEZZANINE FINANCING	(1) A second or third round of financing in a VENTURE CAPITAL, LEVERAGED BUYOUT, or RESTRUCTURING transac- tion, which is generally SUBORDINATE to BANK LOANS but senior to early rounds of venture capital funding. Mezzanine financing is often considered to be pre-INITIAL PUBLIC OFFERING funding. (2) See SUBORDINATED DEBT.	palgrave	29.69	15.2	0	14.05	17.1	11.94	17.75	16.33
MEZZANINE LOAN	A JUNIOR ranking NONRECOURSE LOAN, often used in the context of commercial real estate financing. Such loans, which may carry MATURITIES ranging from 1 to 10 years and feature AMORTIZATION or INTEREST-only payments, are not typically secured on the underlying prop- erty being financed, but on the creditworthiness of the entity that owns the property. See also FIRST LIEN COMMERCIAL MORTGAGE.	palgrave	33.95	13.6	14.6	13.52	14.5	11.89	14.166667	15.33
MFN	See MOST FAVORED NATION.	palgrave	75.88	3.7	0	5.8	5.3	11.73	1	1.6
MICROCREDIT	A sector of development BANKING that is based on the granting of very small LOANS (e.g., $50–100) in order to promote small-scale, local business initiatives.	palgrave	54.56	11.9	0	12.02	16.3	13.72	14.5	13.2
MICROECONOMICS	The study, within the broad area of ECONOMICS, of how individuals and firms make decisions related to the allocation of scarce resources. Focus is placed on microstructures of SUPPLY and DEMAND, and how these interact to establish relative prices. See also MACROECONOMICS.	palgrave	48.81	9.9	13.6	13.22	11.5	11.85	10.333333	15.12
MICROSTOCK	The COMMON STOCK of a very small company, typically one with a MARKET CAPITALIZATION in the tens, or hundreds, of thousands of dollars. Such stocks, which are generally speculative and unproven, TRADE infrequently in the informal OVER-THE-COUNTER bulletin board market. Also known as MICROCAP STOCK. See also LARGE CAP STOCK, MID-CAP STOCK, SMALL CAP STOCK.	palgrave	57.47	8.7	11.7	12.58	11.4	8.91	8.125	10.61
MID-CAP STOCK	The COMMON STOCK of a company with a medium-sized MARKET CAPITALIZATION, generally in the range of $1 billion to $5 billion. See also LARGE CAP STOCK, MICROSTOCK, SMALL CAP STOCK.	palgrave	56.25	9.1	0	9.56	9.6	9.64	9	10

LOSSES OUTSTANDING

In INSURANCE, the amount of losses represent- ing CLAIMS received but not yet paid by the INSURER to INSUREDS. See alsoLOSSES INCURRED.

palgrave

0

68.77

6.4

0

10.54

8.5

11.36

6.5

11.67

LOT

A minimum standard tradable quantity of a SECURITY, COMMODITY, or ASSET, typically set by an EXCHANGE or established through market convention. See also BOARD , ODD , ROUND .

palgrave

0

24.44

13.1

0

12.86

11.5

10.35

10.75

15.97

LP

See LIMITED PARTNERSHIP.

palgrave

0

9.21

12.7

0

15.03

14.6

14.31

2.5

27.87

LSE

See LONDON STOCK EXCHANGE.

palgrave

0

75.88

3.7

0

8.7

7.7

7.78

1

1.6

LTD

See LIMITED.

palgrave

0

35.61

8.8

0

-1.61

5.5

11.63

1

20.8

LTPR

See LONG-TERM PRIME RATE.

palgrave

0

118.18

-2.3

0

5.8

6.5

7.78

1

1.6

LTV

See LOAN-TO-VALUE.

palgrave

0

-6.7

14.7

0

10

19.6

0.1

1

0.8

M&A

Abbreviated form of MERGERS and ACQUISITIONS.

palgrave

0

6.17

13.9

0

16.87

13

11.83

4

15.73

M0

CURRENCY in circulation plus BANK balances at the CENTRAL BANK.

palgrave

0

52.87

8.4

0

11.98

9

12.03

6

12

MAASTRICHT TREATY

A treaty, signed in 1992 in Maastricht, Netherlands, that led to the creation of the EUROPEAN UNION. The treaty defined the development and timeline for EUROPEAN MONETARY UNION and the cre- ation of a single currency, the EURO.

palgrave

0

60.65

9.5

0

10.68

11.6

11.23

12

11.81

MAC

See MATERIAL ADVERSE CHANGE CLAUSE.

palgrave

0

49.48

7.6

0

13.08

10.3

13.36

2.5

10

MACARONI DEFENSE

An ANTITAKEOVER DEFENSE where a poten- tial TARGET company issues BONDS with a REDEMPTION clause forcing the SECURITIES to be redeemed at a very substantial PREMIUM to PAR VALUE in the event of a TAKEOVER; the provision makes the company unattractive to any potential acquirer. See also SCORCHED EARTH DEFENSES.

palgrave

0

46.1

13

0

12.94

15.8

12.14

18

17.2

MACROECONOMICS

The study, within the broad area of ECONOMICS, of the total economic activity of a system, with a focus on NATIONAL INCOME, industrial production, INFLATION/prices, UNEMPLOYMENT, MONEY SUPPLY, INTEREST RATES, and FOREIGN EXCHANGE RATES. See alsoMICROECONOMICS.

palgrave

0

1.1

22.1

0

17.65

26

13.76

28

25.51

MACROHEDGE

A proxy HEDGE, put in place by a company or BANK, that is designed to protect REVENUES and earnings in the event of a deterioration in economic conditions (upto, and including, a RECESSION). Since there is no single instrument or financial CONTRACT that can replicate such conditions,a macrohedge is generally constructed from a variety of UNDERLYINGS that perform well in poor market conditions.

palgrave

0

31.04

16.8

0

13.24

19.3

10.71

22.75

19.58

MAIN STREET

n the United States, the broad class of RETAIL INVESTORS.

palgrave

0

86.71

3.7

0

7.92

6.2

8.87

4

MAINTENANCE PERIOD

A specified period for computing BANK compli- ance with relevant RESERVE requirements.

palgrave

0

17

13.9

0

17.1

14

14.76

11

21.47

MAJORITY CONTROL

A process or structure where effective corporate con-trol is gained by taking a majority, though not absolute, stake in the company’sCOMMON STOCK. See also CONTROLLING INTEREST, LEGAL MECHANISMCONTROL, MANAGEMENT CONTROL, MINORITY CONTROL, TOTALCONTROL, VOTING TRUST CONTROL.

palgrave

0

10.91

16.2

0

19.49

19

13.3

14.5

19.42

MAJORITY INTEREST

See CONTROLLING INTEREST.

palgrave

0

9.21

12.7

0

16.95

16.2

14.31

2.5

27.87

MAKING A BOOK

In the United Kingdom, taking a LONG POSITIONor SHORT POSITION in SECURITIES, COMMODITIES, or other ASSETS forproprietary, rather than client-driven, purposes. Such activity is typical forthe proprietary TRADING desks at BANKS and SECURITIES FIRMS, as well asHEDGE FUNDS. See also BACK BOOK.

palgrave

0

40.35

11.1

14.1

15.25

13.6

11.1

10.666667

14.17

MAKING A MARKET

See TWO-WAY PRICES.DEBT OBLIGATION (CDO) that permits the manager to substitute REFERENCECREDITS in the POOL. This form of CDO allows the substitution of deteriorat-ing credits, but does not provide INVESTORS with transparency on the compos-ition of the PORTFOLIO and carries higher fees than STATIC COLLATERALIZEDDEBT OBLIGATIONS. See also SINGLE TRANCHE COLLATERALIZED DEBTOBLIGATION, SYNTHETIC COLLATERALIZED DEBT OBLIGATION.

palgrave

0

18.65

15.3

16.3

20.19

19.3

12.46

14.666667

16.05

MANAGED FLOATING

See MANAGED FOREIGN EXCHANGE RATE.whose value is set by a CENTRAL BANK or monetary authority via small/regu-lar purchases and sales of CURRENCY and through macroeconomic policies.Managed rates are not strictly fixed or pegged by government authorities, norare they freely determined through pure market SUPPLY and DEMAND forces.Also known as MANAGED FLOATING. See also CRAWLING PEG, PEGGING.

palgrave

0

26.14

16.6

0

16.89

20.8

12.64

19.5

16.2

MANAGED FUND

Any form of INVESTMENT FUND (e.g., MUTUAL FUND, UNIT INVESTMENT TRUST) that features active management by the FUND MANAGER, who typically has significant discretion regarding the nature and timing of ASSETS that can be bought and sold within the fund (but must in all cases adhere to the terms of an approved investment policy).

palgrave

0

16.67

24.4

0

12.09

29.5

12.75

38

27.53

MANAGEMENT CAPITAL

See ECONOMIC CAPITAL.

palgrave

0

9.21

12.7

0

9.23

9.9

9.05

2.5

14.53

MANAGEMENT COMPANY

The primary company of a MUTUAL FUND or other FUND MANAGEMENT organization, responsible for managing all aspects of the support, infrastructure, and policy surrounding an entire group of associated funds.

palgrave

0

-1.28

20.9

0

16.37

21

13.02

26

25.33

MANAGEMENT CONTROL

A process or structure where management gains effective corporate control by accumulating a sufficiently large blockof a company’s COMMON STOCK to direct activities; as with MINORITY CONTROL, this process only works when ownership is so diffuse that even an organized MINORITY INTEREST fails to dominate the company and its actions. See also LEGAL MECHANISM CONTROL, MAJORITY CONTROL, TOTAL CONTROL, VOTING TRUST CONTROL.

palgrave

0

14.63

18.9

0

16.31

21.4

12.05

23.5

21.43

MANDATE

An authorization or approval to arrange a NEW ISSUE of SECURITIES or CORPORATE FINANCE transaction, awarded by a company or sovereign entity to a FINANCIAL INSTITUTION acting as an INTERMEDIARY. COMMERCIAL BANKS, INVESTMENT BANKS, and SECURITIES FIRMS that hope to generate fee income and gain LEAGUE TABLE credit compete aggres- sively for mandates.

palgrave

0

19.2

17.2

0

14.97

18.3

12.7

20.25

19.66

MANDATORY BID

In the United Kingdom, a requirement under the CITY CODE stipulating that an acquiring company must submit a formal BID for a TAKEOVER target once it has amassed 30% of the target’s SHARES in the market.

palgrave

0

43.4

16.2

0

9.88

18.6

10.69

22

17.73

MANUSCRIPT INSURANCE

A customized INSURANCE POLICY with terms that are tailored to an INSURED’s specific requirements. A manu- script contract, which is used when coverage cannot be accommodated via a standard insurance form, reflects special needs, conditions, and PERIL coverages. Also know as MANUSCRIPT POLICY.

palgrave

0

40.04

11.2

14.6

14.9

13.2

12.42

11.166667

15.02

MANUSCRIPT POLICY

See MANUSCRIPT INSURANCE.

palgrave

0

9.21

12.7

0

16.95

16.2

14.31

2.5

27.87

MAPLE BOND

A BOND, NOTE, or CERTIFICATE OF DEPOSIT issued in Canadian dollars in the Canadian markets by a foreign company.NONPURPOSE LOAN, PURPOSE LOAN.

palgrave

0

40.69

13.1

0

13.29

15.5

11.19

15

14.25

MARGIN CALL

A CALL made by a BANK, BROKER, or other FINANCIAL INSTITUTION to an INVESTOR holding a MARGIN LOAN in a MARGIN ACCOUNT when the MAINTENANCE MARGIN has declined below a specified threshold. The investor must supply additional VARIATION MARGIN to return to the specified MAINTENANCE MARGIN or risk a closeout of its position.

palgrave

0

36.12

14.8

0

12.25

15.9

9.72

17.75

15.88

MARGIN LOAN

See PURPOSE LOAN.

palgrave

0

93.81

0.9

0

1.52

3.6

9.05

0.5

1.2

MARGIN TRADING

A form of LEVERAGED TRADING arising when an INVESTOR secures a MARGIN LOAN through a MARGIN ACCOUNT.

palgrave

0

62.68

8.7

0

10.73

10.3

10.05

7.5

6.8

MARGINAL COST

The change in TOTAL COST that comes from producing an incremental unit of a good or service. Marginal cost can change at each new level of production, so the marginal cost at any point relates to the change in cost for that unit. It is computed as the first derivative of total cost with respect to quantity, or:where MC stands for marginal cost, TC for total cost and Q for quantity. See also MARGINAL REVENUE, VARIABLE COST.

palgrave

0

60.35

9.6

12.6

8.41

9.6

8.28

12.375

11.36

MARGINAL REVENUE

The change in REVENUE that comes from selling an incremental unit of a good or service. Marginal revenue can change at each new level of sales, so the marginal revenue at any point relates to the change in revenue for that unit. It is computed as the first derivative of total revenue (TR) with respect to quantity (Q), or:= ∂TR∂QSince revenue is itself a function of price times quantity, MR can also be expressed as the first derivative of price (P) with respect to quantity, or:See also MARGINAL COST.

palgrave

0

49.79

13.7

13.6

9.35

15.4

9.01

18.166667

14.13

MARGINAL TAX RATE

The incremental TAX levied for an additional unit of INCOME (or earnings), computed as the change in tax liability (due or paid) divided by the change in taxable income (earnings). See also AVERAGE TAX RATE, EFFECTIVE TAX RATE, STATUTORY TAX RATE.

palgrave

0

50.67

11.3

0

10.44

12.6

9.27

14.25

16

MARINE INSURANCE

A general form of PROPERTY AND CASUALTY INSURANCE used to cover goods in transit (i.e., via air, land, or waterway) and the vehicles used for transportation.

palgrave

0

36.63

14.6

0

10.68

15.5

10.39

20

19.63

MARKER CRUDE

A BENCHMARK reference crude oil that is used in pricing and TRADING. Different qualities of oil from different regions may be pegged to particular marker crudes, such as Brent Blend, West Texas Intermediate, Dubai, and so forth.

palgrave

0

61.16

9.3

0

11.89

12.3

11.38

12.25

11.72

MARKET CAPITALIZATION

A measure of a PUBLIC COMPANY’s current value, computed as:MC = S × Shswhere S is the current price of the COMMON STOCK and Shs is the number ofOUTSTANDING SHARES.Since the stock price changes on a daily basis, the market capitalization of the firm changes in tandem. Also known as MARKET VALUE.

palgrave

0

54.05

12.1

0

9.99

13.8

9.86

15.5

13.34

MARKET DEPTH

The number of SHARES of STOCK in a given company that are BID and OFFERED, ranked by price. Market depth contributes to the DISPLAYED LIQUIDITY that all INVESTORS can see.

palgrave

0

73.17

6.8

0

8.98

8.3

8.59

8

8.67

MARKET ECONOMY

See FREE .

palgrave

0

77.91

2.9

0

-10.31

-1.7

0.1

0.5

0.8

MARKET FLEX

Legal language contained in a LOAN transaction that allows the ARRANGER to change pricing based on INVESTOR demand, itself a func- tion of market conditions. Market flex also allows the arranger to reallocate portions of the loan across various TRANCHES.

palgrave

0

51.18

11.1

0

13.34

13.9

11.34

12

MARKET IF TOUCHED ORDER

An ORDER to purchase or sell a SECURITY if a particular price is reached; once attained, the order converts into a MARKET ORDER and is filled at the best available market price.

palgrave

0

47.46

14.6

0

9.24

16

9.17

18

15.3

MARKET IMPACT

The effect of information transfer from an ORDER on the market price of a quoted SECURITY.

palgrave

0

46.78

10.7

0

9.28

8.7

9.36

9

11.4

MARKET MICROSTRUCTURE

The study of the specific mechanics of finan- cial marketplaces, focusing particularly on the way in which SUPPLY and DEMAND interact and the way in which PRICE DISCOVERY is achieved.

palgrave

0

41.03

15

0

12.49

17.7

11.44

22

21.33

MARKET MODEL

A general corporate system that is characterized by very diffuse SHAREHOLDINGS, deep and LIQUID CAPITAL MARKETS, dynamic CAPITAL reallocation, advanced legal and regulatory frameworks, and an active CORPORATE CONTROL MARKET. The United States, the United Kingdom, and Canada are representative examples of the market model. See also HYBRID MODEL, RELATIONSHIP MODEL.

palgrave

0

11.92

15.8

15

17.22

16.3

10.98

12.833333

13.86

MARKET NEUTRAL

A common HEDGE FUND or INVESTMENT strategy where a manager creates a PORTFOLIO of LONG and SHORT positions in an EQUITY market. The construction of a market neutral portfolio allows the manager to simultaneously express views on stocks believed to be undervalued and those that are overvalued. A market neutral portfolio can result in theelimination of SYSTEMATIC RISK in favor of IDIOSYNCRATIC RISK arising from individual long and short positions. See also LONG ONLY.

palgrave

0

35.78

12.9

15.2

13.46

13

10.1

13.75

14.43

MARKET ON CLOSE ORDER

An ORDER to purchase or sell a SECURITY at the price prevailing at market close. The market on close is effectively equiva- lent to a delayed MARKET ORDER.

palgrave

0

57.27

8.8

0

8

7.1

8.28

7.5

9.89

MARKET ORDER

An ORDER for the purchase or sale of a SECURITY at the current market level; as long as sufficient LIQUIDITY is available, the order will be filled at the market price. See also LIMIT ORDER, MARKET IF TOUCHED ORDER, MARKET ON CLOSE ORDER, STOP ORDER, TIME ORDER.

palgrave

0

56.08

11.3

0

8.71

12

7.83

13.25

11.95

MARKET OUT CLAUSE

See MATERIAL ADVERSE CHANGE CLAUSE.

palgrave

0

49.48

7.6

0

13.08

10.3

13.36

2.5

10

MARKET POWER

A situation where a purchaser or supplier of raw materials or finished goods has such a significant presence that it can dictate, to a signifi- cant degree, favorable pricing terms. Such power is limited to a small number of companies that effectively operate as MONOPOLIES or OLIGOPOLIES.

palgrave

0

30.7

14.8

0

12.36

14.7

11.52

17.75

19.61

MARKET PRICE

(1) The price for a good or service that is determined through the interaction of SUPPLY and DEMAND in a free market setting. (2) An EXECUTION price on an ORDER that reflects the current market BID or market OFFER. (2) See also LIMIT PRICE.

palgrave

0

35.28

19.3

0

8.37

21.7

9.41

25

20.33

MARKET RISK

The RISK of loss due to an adverse move in the MARKET VALUE of an ASSET or market indicator, such as a COMMON STOCK, BOND, LOAN, FOREIGN EXCHANGE RATE, or COMMODITY. Market risk, which is a form of FINANCIAL RISK, can be subcategorized into BASIS RISK, CURVE RISK, DIRECTIONAL RISK, SPREAD RISK, and VOLATILITY RISK.

palgrave

0

52.02

12.8

0

9.29

14.7

8.73

16.75

15.36

MARKET RISK AMENDMENT

An amendment to the BASLE ACCORD framework, agreed in 1996, permitting participating BANKS to use their internal models in the computation of VALUE-AT-RISK for CAPITAL ALLOCATION purposes. See also BASLE II.

palgrave

0

38.82

11.7

0

14.44

13.2

12.55

11.25

13.94

MARKET SEGMENTATION THEORY

A theory of INTEREST RATES indicat- ing that each MATURITY segment of the YIELD CURVE is separate and dis- tinct; INVESTORS commit CAPITAL to the sector of their choice, impeding the free flow of capital to other segments. See also EXPECTATIONS THEORY, LIQUIDITY PREFERENCE THEORY.Additional references: Lutz and Lutz (1951); Meiselman (1962).

palgrave

0

28.17

15.8

0

14.05

18

12.21

20

18.09

MARKET SWEEP

A second offer for the purchase of outstanding SHARES of COMMON STOCK, made by an acquiring company to INVESTORS in the TARGET company. The market sweep, which comes after an initial TENDER OFFER has been made, is intended to build the acquirer’s position to a con- trolling stake and may be executed at a price that is higher than the initial tender.

palgrave

0

48.47

14.2

0

9.88

16.1

9.76

19.5

16.27

MARKET TIMING

An INVESTMENT strategy used by certain FUND MANAGERS and proprietary TRADING operations that attempts to select the proper points through which to establish a LONG POSITION or SHORT POSITION in a particular ASSET. In reality such a strategy is difficult to imple- ment consistently.

palgrave

0

32.22

14.2

0

13.81

15.1

11.19

17

17.89

MARKET VALUE

(1) The current value of an ASSET or LIABILITY based on quoted BIDS or OFFERS, reflecting a realizable economic value in the market- place. (2) See MARKET CAPITALIZATION. (1) See also BOOK VALUE.

palgrave

0

21.06

18.5

0

10.05

18.3

11.49

21.5

19.26

MARKET VALUE ADDED

A measure of a company’s financial performance that compares its MARKET VALUE with CAPITAL invested. The greater the mar- ket value added, the greater the company’s ability to use its capital resources effectively. See also ACCOUNTING PROFIT, ECONOMIC PROFIT, ECONOMIC VALUE ADDED.

palgrave

0

40.35

11.1

14.6

14.32

12.5

9.97

11

13.22

MARKETABLE SECURITY

Any SECURITY that can be sold without limita- tion in a SECONDARY MARKET, thus featuring a high degree of LIQUIDITY. While many securities can be freely traded and are thus marketable some, such as PRIVATE PLACEMENTS, are designed primarily as “hold to maturity” ASSETS and are more accurately considered NONMARKETABLE SECURITIES. Certain ILLIQUID assets, such as MORTGAGES, LOANS, and ACCOUNTS RECEIVABLE, can be converted into marketable securities via the SECURITIZATION process.

palgrave

0

30.5

14.9

15.5

15.79

17.7

11.48

16.5

16.24

MARKOV PROCESS

A STOCHASTIC PROCESS where only the current price of an ASSET is relevant in determining what may happen in the future, i.e., previous prices and the number of periods preceding the current observation are irrele- vant. The Markov process is used in numerous DERIVATIVE pricing models.MULTIPERIOD PORTFOLIO OPTIMIZATION.

palgrave

0

30.2

15

0

15.03

17.4

12.39

18

19.6

MARRIED PUT

A PUT OPTION that is acquired by an INVESTOR as a HEDGE at the same time as the UNDERLYING reference ASSET is purchased. As the price of the underlying asset declines the value of married put increases, and vice versa.

palgrave

0

59.64

9.9

0

8.24

9.6

9.37

12

11

MAS

See MONETARY AUTHORITY OF SINGAPORE.

palgrave

0

-1.29

14.7

0

14.24

11.2

13.36

4.5

26

MASTER FUND

A FUND that invests CAPITAL gathered from INVESTORS through one or more FEEDER FUNDS. The master fund structure is widely employed in the HEDGE FUND sector.

palgrave

0

75.2

6

0

10.6

8.8

10.96

6

5.2

MASTER LIMITED PARTNERSHIP (MLP)

A form of organization where the legal structure mirrors a conventional LIMITED PARTNERSHIP but where the business structure assumes that of a CORPORATION. An MLP may be publicly traded on an EXCHANGE.

palgrave

0

46.78

10.7

0

12.87

11.6

10.35

10.5

12.65

MASTER NOTE

COMMERCIAL PAPER offered by a direct ISSUER to the INVESTMENT management or TRUST department of a BANK or an INSTITUTIONAL INVESTOR that has periodic amounts to invest in short- term FIXED INCOME instruments. The master note, which pays a particular SPREAD above a stated commercial paper rate, is a dependable source of funds for the issuer and eliminates the administrative burden that would otherwise arise through the issuance of smaller denomination notes.

palgrave

0

26.48

18.5

0

14.34

22.1

11.12

25

21.07

MASTER TRUST

A vehicle often used to hold a POOL of ASSETS securing anASSET-BACKED SECURITY.

palgrave

0

41.36

10.7

0

10.83

9.3

11.57

10.5

14.43

MATCH

The process of matching a buyer and seller of an ASSET, typically STOCK. See also CROSS, CROSSING NETWORK, DARK POOL.

palgrave

0

69.79

6

0

8.21

6.6

9.66

4.5

6

MATCHED BARGAIN

In the United Kingdom, the pairing of an ORDER to buy and an order to sell a specific STOCK.

palgrave

0

69.11

8.3

0

4.7

6.4

6.24

10.5

9.71

MATCHED BOOK

A PORTFOLIO of ASSETS and LIABILITIES (such as the LOANS and DEPOSITS of a BANK, or the REPURCHASE AGREEMENTS and REVERSE REPURCHASE AGREEMENTS of a SECURITIES FIRM), with equal (or nearly equal) MATURITIES or DURATIONS. A matched book minimizes or eliminates an institution’s exposure to MARKET RISK and/or LIQUIDITY RISK, but generates a smaller RETURN on CAPITAL. See also GAP, GAPPING, MISMATCH, OPEN BOOK, UN.

palgrave

0

40.99

12.9

15.5

12.59

14.7

10.79

15.5

16.06

MATCHING CONCEPT

A central ACCOUNTING CONCEPT that indicates a company should properly match its INCOME with its EXPENSES in any given accounting period (e.g., on an ACCRUAL BASIS). See also CONSISTENCY CONCEPT, GOING CONCERN CONCEPT, PRUDENCE CONCEPT.

palgrave

0

28.33

13.7

0

14.27

14.4

10.82

13.25

15

MATERIALITY

An assessment of information classified as material, and which must be considered in the ACCOUNTING process and in any relevant financial disclosure. Though the classification of materiality is at least partly subjective, a general guideline suggests that the exclusion of material informa- tion may have an adverse effect on STAKEHOLDERS.

palgrave

0

20.72

16.6

0

16.08

18.4

11.51

21

22

MATILDA

A BOND, NOTE, or CERTIFICATE OF DEPOSIT issued in Australian dollars in the Australian markets by a foreign company.

palgrave

0

52.19

10.7

0

11.72

12.4

10.4

11.5

9.71

MATURITY

See DATE.

palgrave

0

77.91

2.9

0

-10.31

-1.7

0.1

0

0.8

MATURITY BUCKET

A framework of time bands used by BANKS and other FINANCIAL INSTITUTIONS to manage their ASSETS and LIABILITIES, <1 year, 1–3 years, 3–5 years, 5–7 years, and so forth. Assets and liabilities are assigned to their respective buckets and then used to compute a GAP.

palgrave

0

57.1

10.9

0

10.33

12.9

11.07

13.75

12.56

MATURITY DATE

The date on which a financial CONTRACT, ASSET, or LIABILITY matures or comes due. Also known as MATURITY. See also EXPIRY DATE, REDEMPTION DATE.

palgrave

0

54.9

7.6

9.7

8.13

6.3

9.95

4.333333

9.87

MAXIMUM FORESEEABLE LOSS

A worst-case loss scenario applied by an INSURER or REINSURER to a potential CATASTROPHIC HAZARD. See alsoMAXIMUM PROBABLE LOSS.

palgrave

0

36.45

10.5

0

13.6

10.6

11.59

6.75

16.43

MAXIMUM LOSS

A loss measure indicating the amount a firm might lose across a PORTFOLIO of MARKET RISKS by ignoring any offsetting effects obtained from DIVERSIFICATION. Maximum loss can be regarded as an extreme form of the VALUE-AT-RISK computation. See also SCENARIO ANALYSIS.

palgrave

0

40.65

11

13

13.27

11.3

10.48

8.833333

14.26

MAXIMUM PROBABLE LOSS

An EXPECTED LOSS computation applied by an INSURER or REINSURER to a catastrophic or noncatastrophic RISK event. See also AMOUNT AT RISK, MAXIMUM FORESEEABLE LOSS.

palgrave

0

41.87

10.5

0

13.38

11

11.2

10.25

17.8

MBO

See MANAGEMENT BUYOUT.

palgrave

0

34.59

9.2

0

11.15

11.5

14.31

1.5

14.53

MBS

See MORTGAGE-BACKED SECURITY.

palgrave

0

-24.64

17.4

0

22.75

22.5

19.58

2.5

14.53

MEAN

The unweighted average of a set of observations, which can be com- puted in arithmetic or geometric form:Arithmetic mean:Geometric mean:m= (Πi xi )Nwhere xi is an observation and N is the number of observations. See alsoMEDIAN, MODE.

palgrave

0

35.78

12.9

0

11.89

12.9

10.53

13.75

13.89

MEAN REVERSION

The observable tendency for INTEREST RATES, EQUITIES, and certain other financial variables to return to a MEAN level over the long term. Mean reversion is incorporated into certain DERIVATIVE pricing models.

palgrave

0

30.36

12.9

0

14.96

13.4

10.52

11.75

16.52

MEAN VARIANCE ANALYSIS

The process of evaluating the riskiness of a PORTFOLIO based on the EXPECTED RETURN and RISK (or VARIANCE) of potential outcomes. A portfolio can be optimized for single or multiple frame- works through this process. Also known as MEAN VARIANCE OPTIMIZATION. See also MARKOWITZ PORTFOLIO OPTIMIZATION, MODERN PORTFOLIO THEORY, MULTIPERIOD PORTFOLIO OPTIMIZATION.Additional reference: Markowitz (1952).

palgrave

0

32.09

12.2

14.9

17.33

15.2

10.35

11.125

14.25

MEDIAN

A form of obtaining an average figure, typically obtained by order- ing the values from largest to smallest and then selecting the center value (when the number of observations is odd) or the average of the two center values (when the number of observations is even). See also MEAN, MODE.

palgrave

0

46.1

13

0

9.7

13.6

8.35

16

14

MEDIUM OF EXCHANGE

A mechanism (often with little INTRINSIC VALUE) to store and transfer value, allowing for the efficient payment of goods and services. While all manner of COMMODITIES have historically been used as a medium of exchange, money is now the most common form. See alsoBANKNOTE, FIAT MONEY.

palgrave

0

47.49

10.4

11.9

11.24

10.7

8.86

9

12.21

MEDIUM-TERM DEBT

Any form of DEBT with a MATURITY DATE of 1 to 10 years, depending on jurisdiction or ACCOUNTING rules. See also LONG-TERM DEBT, SHORT-TERM DEBT.LONDON INTERBANK OFFERED RATE, COMMERCIAL PAPER, TREASURY BILLS, or the PRIME RATE. See also EURO MEDIUM-TERM NOTE (EMTN).

palgrave

0

57.27

8.8

11.9

11.24

10.8

11.47

8.333333

11.31

MEMBER BANK

A BANK that is officially part of a country’s CENTRAL BANK or monetary authority system, or part of a national CLEARING system.

palgrave

0

40.69

13.1

0

10.15

12.3

10.47

15

16.07

MEMORANDUM OF ASSOCIATION

In the United Kingdom, a document that presents essential information on a new company that seeks to be rec- ognized as a REGISTERED COMPANY. The memorandum is filed with the Registrar of Companies.

palgrave

0

46.27

10.9

0

10.9

10.5

10.2

12.75

15.08

MERCHANT BANK

In the United Kingdom, a BANK that provides clients with CORPORATE FINANCE, RISK MANAGEMENT, and INVESTMENT man- agement advice, and deals actively in SECURITIES UNDERWRITING and TRADING and PRIVATE EQUITY investments. A merchant bank does not actively accept DEPOSITS or grant LOANS as a main line of business. See alsoBOUTIQUE, INVESTMENT BANK.

palgrave

0

45.46

11.2

14.1

14.32

13.9

11.48

12.333333

13.84

MERGER ACCOUNTING

The ACCOUNTING policies used when two companies arrange a MERGER as equals. Under this process the BALANCE SHEET accounts of the two companies are simply added together, and no changes to GOODWILL are affected. Also known as POOLING OF INTERESTS ACCOUNTING. See also ACQUISITION ACCOUNTING.

palgrave

0

51.55

8.9

11.7

12.62

10

9.81

6.875

8.96

MERGER ARBITRAGE

See RISK ARBITRAGE.

palgrave

0

59.97

5.6

0

5.35

6.8

14.31

1.5

14.53

METI

See MINISTRY OF ECONOMY, TRADE, AND INDUSTRY.

palgrave

0

55.91

7.2

0

9.87

8.3

10.75

4.5

14.23

MEZZANINE FINANCING

(1) A second or third round of financing in a VENTURE CAPITAL, LEVERAGED BUYOUT, or RESTRUCTURING transac- tion, which is generally SUBORDINATE to BANK LOANS but senior to early rounds of venture capital funding. Mezzanine financing is often considered to be pre-INITIAL PUBLIC OFFERING funding. (2) See SUBORDINATED DEBT.

palgrave

0

29.69

15.2

0

14.05

17.1

11.94

17.75

16.33

MEZZANINE LOAN

A JUNIOR ranking NONRECOURSE LOAN, often used in the context of commercial real estate financing. Such loans, which may carry MATURITIES ranging from 1 to 10 years and feature AMORTIZATION or INTEREST-only payments, are not typically secured on the underlying prop- erty being financed, but on the creditworthiness of the entity that owns the property. See also FIRST LIEN COMMERCIAL MORTGAGE.

palgrave

0

33.95

13.6

14.6

13.52

14.5

11.89

14.166667

15.33

MFN

See MOST FAVORED NATION.

palgrave

0

75.88

3.7

0

5.8

5.3

11.73

1

1.6

MICROCREDIT

A sector of development BANKING that is based on the granting of very small LOANS (e.g., $50–100) in order to promote small-scale, local business initiatives.

palgrave

0

54.56

11.9

0

12.02

16.3

13.72

14.5

13.2

MICROECONOMICS

The study, within the broad area of ECONOMICS, of how individuals and firms make decisions related to the allocation of scarce resources. Focus is placed on microstructures of SUPPLY and DEMAND, and how these interact to establish relative prices. See also MACROECONOMICS.

palgrave

0

48.81

9.9

13.6

13.22

11.5

11.85

10.333333

15.12

MICROSTOCK

The COMMON STOCK of a very small company, typically one with a MARKET CAPITALIZATION in the tens, or hundreds, of thousands of dollars. Such stocks, which are generally speculative and unproven, TRADE infrequently in the informal OVER-THE-COUNTER bulletin board market. Also known as MICROCAP STOCK. See also LARGE CAP STOCK, MID-CAP STOCK, SMALL CAP STOCK.

palgrave

0

57.47

8.7

11.7

12.58

11.4

8.91

8.125

10.61

MID-CAP STOCK

The COMMON STOCK of a company with a medium-sized MARKET CAPITALIZATION, generally in the range of $1 billion to $5 billion. See also LARGE CAP STOCK, MICROSTOCK, SMALL CAP STOCK.

palgrave

0

56.25

9.1

0

9.56

9.6

9.64

9

10