Glossary List M

Macroeconomics

Macroeconomics refers to the field of economics that studies the behavior of aggregate economy. In macroeconomics, various factors like price levels, inflation, national income, and GDP and unemployment changes.

Manufacturing index

Manufacturing index is based entirely on the surveys conducted on manufacturing firms. This index helps to monitor the production, employment, new orders, investors and the supplier deliveries.

Margin

When an investor borrows money from the broker to purchase shares, it is called as margin. This is similar to a loan taken from the brokerage to trade.

Marginal deficit

The amount by which a said resource falls short of a mark is called as marginal deficit. This is mostly used for knowing the difference between the inflow and outflow of cash.

Margin trading

Margin trading occurs when a trader is allowed to buy more shares that he would normally be able to do so with the funds available in the trading account. One needs to have a margin account for the same.

Market capitalization

Market capitalization is the company’s value that is traded on the share market. This is calculated by multiplying the total number of stocks with the present share price.

Market forecast

Market forecast can be termed as an important component of stock market analysis. It helps to study the trends and characteristics of the target market.

Market lot

Market lot is the number of stocks investors purchase in a single transaction. In terms of options, market lot refers to the number of contracts that are in one derivative security.

Market risk

Market risk refers to the possible loss an investor can experience due to factors that also affect the performance of stock markets. This is also known as systematic risk and is hard to eliminate via diversification.

Mark-to-Market

MTM or Mark-to-market is the value of accounts which can change with time. Examples of MTM are assets and liabilities. MTM provides a real appraisal of the current financial situation of a company.

MCX

MCX is the Multi Commodity Exchange of India Ltd. and is the independent commodity exchange of India. MCX was established in year 2003 and is located in Mumbai.

Mergers

Mergers are deals that unique two different companies into a new company. There can be various kinds of mergers and also many reasons why companies undergo a merger.

Mid cap

When a company has a market capitalization that varies between $2 billion to $10 billion, it is called a mid cap company. This falls in between the pack of large cap and small cap companies.

Model portfolio

A model portfolio can vary from investor to investor. It is made keeping the financial needs and the risk appetite of the investor in mind. An ideal investment portfolio would be designed keeping factors like age, savings, income, assets, and financial obligations in mind.

Monetary policy

Monetary policy refers to the actions taken by the Central bank or other equivalent regulatory board which determines the rate of growth and the size of money supply and this in turn shows an effect on the interest rates.

Money laundering

A process where large amounts of funds that are obtained from serious crimes like terrorist activities, drug trafficking are shown to be originated from a legitimate source, is known as Money laundering.

Money market

Money market is the market where instruments that have high liquidity and short maturities are traded. This is mostly used by investors for borrowing or lending for short term and the maturities here range from overnight to a year.

Monthly income plans (MIP)

Monthly income plans are financial instruments that provide a fixed monthly payment to investors. This is treated as a stable source of income by many and is opted mostly by retired persons or by those who do not have other fixed monthly sources of income.

Monthly income scheme (MIS)

Monthly income scheme or MIS refers to the investment option which provides a monthly pay to investors. These are of low risk and are preferred mostly by senior citizens.

Moving Average

Moving average is used in stock analysis to study the price movements of a share. The two commonly used Moving averages are simple moving average and exponential moving average.

Multi cap

Multi caps are mutual funds that are diversified where the investors invest in stocks across market capitalization.

Multiplier

Multiplier is the adjustment that is made to the P/E ratio of a company by taking the present interest rates into account. This is also used to discount the future earnings and also helps investors to compare the growth expected for the money they invested.

Mutual funds

Mutual funds are investment options that are made of pool of funds that are collected from a number of investors. These funds are in turn invested in securities like bonds, stocks and other money market instruments.

Mutual fund service system

MFSS or mutual fund service system is a collection system that functions online. This is provided by NSE so that eligible members can place redemption or subscription orders online depending on the orders that are received from their investors.