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. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an 80% loan-to-value ratio, the second position lien has a 10% loan-to-value ratio and the borrower makes a 10% down payment. 80-10-10 mortgage transactions are piggy-back mortgage transactions, and are frequently used by borrowers to avoid paying private mortgage insurance.
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific benchmark, such as a SPDR. Unlike actively managed ETFs, passive ETFs are not managed by a fund manager on a daily basis.
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another market so that it balances out. So when examining a specific market, if all other markets are in equilibrium, Walras' Law asserts that the examined market is also in equilibrium.
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another.
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following:
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
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