Financial Theory Terms

  1. McGinley Dynamic Indicator

  2. Mean Reversion

  3. Mechanism Design

  4. Media Effect

  5. Median

  6. Mental Accounting

  7. Merger Arbitrage

  8. Merton Model

  9. Mesokurtic

  10. Mezzanine Financing

  11. Microeconomic Pricing Model

  12. Mid-Value Stock

  13. Misery Index

  14. Mode

  15. Model Risk

  16. Modern Portfolio Theory - MPT

  17. Modified Internal Rate Of Return - MIRR

  18. Modified Sharpe Ratio

  19. Modigliani-Miller Theorem - M&M

  20. Mondustrial Policy

  21. Monetarism

  22. Monetarist Theory

  23. Monetary Aggregates

  24. Monetary Theory

  25. Money Factor

  26. Moneyness

  27. Monte Carlo Simulation

  28. Moore's Law

  29. Mountain Range Options

  30. Multi-Factor Model

  31. Multiple Compression

  32. Multiple Discriminant Analysis - MDA

  33. Multiple Linear Regression - MLR

  34. Multiplier

  35. Mumbai Interbank Bid Rate - MIBID

  36. Musawamah

  37. Musharakah

  38. Mutual Fund Cash Level

  39. Mutual Fund Theorem

  40. Mutualization Of Risk

  41. Myron S. Scholes

  42. Natural Law

  43. Negative Correlation

  44. Neglected Firm Effect

  45. Net Exporter

  46. Net Importer

  47. Net Institutional Sales - NIS

  48. Net Margin

  49. Net Present Value Of Growth Opportunities - NPVGO

  50. Net Present Value Rule

  51. Net Profits Interest

  52. Net-Net

  53. Neutral

  54. Neutrality Of Money

  55. New Keynesian Economics

  56. New York Dollar

  57. Nick Leeson

  58. Nominal

  59. Nominal Value

  60. Non-Controlling Interest

  61. Non-Operating Asset

  62. Non-Sampling Error

  63. Nonmonetary Assets

  64. Normal Distribution

  65. Normative Economics

  66. North American Loan Credit Default Swap Index - LCDX

  67. Notching

  68. Nova/Ursa Ratio

  69. Null Hypothesis

  70. NYSE Amex Composite Index

  71. Odd Lotter

  72. Offensive Competitive Strategy

  73. Okun's Law

  74. Operating Cash Flow Margin

  75. Operating Expense Ratio - OER

  76. Operating Revenue

  77. Operational Efficiency

  78. Opportunity Cost

  79. Oprah Effect

  80. Optimum Currency Area Theory

  81. Option Premium

  82. Option Schedule

  83. Organic Sales

  84. Osborning

  85. Outbound Cash Flow

  86. Outcome Bias

  87. Overnight Return

  88. Overreaction

  89. P-Value

  90. Pale Recession

  91. Paradox of Rationality

  92. Paradox Of Thrift

  93. Pareto Improvement

  94. Parity

  95. Payee

  96. Payer

  97. Peak Debt

  98. Peer Review

  99. Performance Drag

  100. Performance-Based Index

Hot Definitions
  1. Family Limited Partnership - FLP

    A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-owned business partnership that family members own shares of. FLPs are frequently used as an estate tax minimization strategy, as shares in the FLP can be transferred between generations, at lower taxation rates than would be applied to the partnership's holdings.
  2. Yield Burning

    The illegal practice of underwriters marking up the prices on bonds for the purpose of reducing the yield on the bond. This practice, referred to as "burning the yield," is done after the bond is placed in escrow for an investor who is awaiting repayment.
  3. Marginal Analysis

    An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions. Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.
  4. Treasury Inflation Protected Securities - TIPS

    A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are backed by the U.S. government and since their par value rises with inflation, as measured by the Consumer Price Index, while their interest rate remains fixed.
  5. Gilt-Edged Switching

    The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments.
  6. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP's cash flow, whereas the general partner is the party responsible for managing the MLP's affairs and receives compensation that is linked to the performance of the venture.
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