Glossary M

Mandatory Call/Redemption

A call which is required by statute or the bond indenture to be exercised if some particular event takes place.

Mandatory Put

A put on a bond which will occur unless the bond holder takes a specific action to retain the bond after the put. See also Optional Put.

Margin Call

A demand upon a customer to put up money or securities with the broker. The call is made when a purchase is made; also if a customer's equity in a margin account declines below a minimum standard set by the Exchange or by the firm.

Market Capitalization (Cap)

Value of a corporation as determined by the market price of its outstanding common stock. Calculated by multiplying the number of shares outstanding by the current price of the shares.

Market Discount

A bond has market discount if the purchase price is less than the compound accreted value (for and OID bond) or par (for a non OID bond).

Market Order

An order that is to be executed as promptly as possible at the best price available in the market. It is important to note that in a volatile market environment, the execution may be at a price significantly different from the price quoted at the time the order was placed. See also Limit Order

Market Timing

The attempt to predict future market movements, and basing buy and sell decisions on those forecasts.

Maximum Front-End Sales Charge

Also Maximum Front-End Load. The utmost sales charge that can be assessed up-front to invest in a mutual fund. The front-end load fee is assessed at the time of purchase, with the charge amount often dependent on the dollar amount of the purchase.

MBIA

MBIA Insurance Corp. - An insurance company specializing in municipal bond insurance. MBIA is mostly publicly held (approx. 88%) through its parent, MBIA, Inc., traded on the NYSE as MBI. Bonds insured by MBIA are eligible for Triple-A ratings from Moody's, S&P and Fitch.

Mid Cap Funds

Mid Cap Mutual Funds seek long-term capital appreciation by investing in stocks of medium size companies, as determined by market capitalization. Typically, capitalizations between $1 billion and $5 billion are ranked as medium capitalization companies.

MIG Rating

The investment grade rating assigned by Moody's Investors Service to short-term notes and commercial paper. MIG stands for Moody's Investment Grade. MIG ratings range from MIG1 (the strongest investment grade) to MIG4 (the weakest investment grade). See also Moody's Credit Ratings.

Minimum Initial Investment

The lowest amount of money that one can invest in a security for the first time.

Minimum Subsequent Investment

The lowest additional amount of money that can be invested into a security after an additional investment.

Mixed Lot

The combination of a round lot and odd lot quantity on one order, for example 126 shares.

Modified Duration

A measure of a security's time weighted present value of cash flows that takes into consideration periodic coupon payments and prevailing interest rates. The duration is usually shorter than the stated term to maturity on all fixed income securities, except for zero coupon bonds, for which they are equal. Duration indicates how interest changes will affect a bond's price.

Money Market

Securities traded in the money market, such as U.S. Treasury bills, bankers' acceptances, commercial paper, and negotiable certificates of deposit. (or)
Dealers and their network who trade short-term, relatively risk-free, securities.

Monthly Payment

The amount you pay on your mortgage loan on a monthly basis. Normally, a monthly mortgage payment consists of principal, interest, property taxes and homeowners insurance-known as PITI

Moody's Credit Ratings

A designation given by Moody's to indicate the relative credit quality, or the strength of the issuer's ability to pay a bond's obligation.

Mortgage Insurance (MI)

A policy that guarantees payment of a mortgage loan in case of default. Paid by the homeowner, mortgage insurance is not required on a conventional loan if your down payment is at least 20 percent.

Mortgage Insurance Premium (MIP)

An amount paid at closing or as a part of your monthly payment for mortgage insurance.

Mortgage Note

A document that holds you legally responsible to repay your loan. It indicates the terms and conditions of the loan and how it will be repaid, the monthly payment amount, the date payment is due, the interest rate and the length of the mortgage.

Mortgagor

The borrower in a mortgage loan transaction.

MPT Statistics

Statistics common to a discipline known as Modern Portfolio Theory. These figures are commonly used to evaluate risk and other factors relating to securities. See Beta, R-Squared, and Standard Deviation.

MSRB The Municipal Securities Rulemaking Board

The regulatory body which has jurisdiction over municipal bond dealers. The SEC (Securities and Exchange Commission) must approve any rules proposed by the MSRB.

MUD Municipal Utility District

In Texas, MUD's issue bonds in order to finance the construction or improvement of water, sewerage and drainage facilities within the district. Municipal Utility Districts are subject to the oversight of the Texas Water Commission. Bonds are general obligations of the districts.

Multi

Family Housing Revenue Bonds - Bonds issued to finance multi-family housing (apartments). Bonds are secured by the revenues of the project(s).

Multi-Sector Funds

A mutual fund that seeks income by investing without geographic boundary in corporate debt, government debt or preferred securities. Investments are not tied to any specific maturity or duration.

Municipal Bond Fund

A mutual fund that invest in debt securities issued by a state or local government or governmental entity, typically for building roads, schools, etc. The interest is usually exempt from federal income taxes,

Municipal Bonds

Fixed Income Securities issued by state and local governments or their agencies.

Municipal High Yield Fund

A mutual fund that seeks tax-free income by investing a minimum of 65% of its assets in generally low quality issues from any state municipality.

Municipal Insured Fund

A mutual fund that that seeks federally tax-free income by investing a minimum of 65% of its assets in municipal debt obligations that are insured as to timely payment of principal and interest.

Municipal National Fund

A mutual fund that seeks federally tax-free income by investing at least 65% in issues from any state municipality.

Municipal Single State Fund

A mutual fund that seeks tax-free income by investing in issues, which are exempt from federal taxation of a specified state.