MUTUAL FUND
This is the umbrella US term that refers to their equivalent of unit trusts and open ended investment companies. READ MORE
M
MULTIPLE EXPANSION AND CONTRACTION
Share price rises can be driven by two factors – one is an increase in earnings and the other is multiple expansion. This is where investors mark-up a share in the expectation of future earnings growth rather than on the basis of actual earnings growth. The reverse can also happen. When investors get nervous they …
MOVING AVERAGE
A moving average is a way of assessing price trends. The problem with looking at say single daily prices for stocks is the underlying trend, up or down, can be masked by short term volatility. A moving average tries to solve this. For example say a share closes over three days at £2, £2.20 and …
MONEY SUPPLY
Many people cannot afford to buy their home outright. A mortgage is a loan secured against a property that funds the part of it a borrower cannot afford themselves. For example if you have a deposit of £50,000 towards a property that costs £200,000, your mortgage will be for the difference of £150,000. You pay …
MONEY PURCHASE SCHEME
Also known as defined contribution schemes, money purchase schemes are a way of building up a pension fund. An employee and an employer can both contribute with the contribution from an employer typically being a fixed percentage of the employee’s salary. Contributions into a money purchase pension receive tax relief. On retirement the resulting pot …
MONEY LAUNDERING
This is the process by which a criminal tries to convert money and other assets that are acquired from crimes (these include drug trafficking and terrorism) into legitimate funds that will not attract any attention from regulators or other authorities. This usually involves concealing their origin via a series of “layering” transactions designed purely for …
MODE
This is an average value that is calculated simply by looking for the most common item in a sample. For example if a share price closes at the following prices over five days – £2, £2, £2.40, £2.50 and £2.10, the mode is £2. READ MORE
MINORITY INTEREST
These arise where a firm is not owned outright by another firm – its “parent” company. Say for example a predator buys 80% of another firm’s voting shares. It now has control of the entire business since it can outvote other shareholders. When it produces its accounts which combine the two firms together this control …
MID CAP
These are stocks that are not large enough to be large cap but are nonetheless relatively big and widely held and traded. The exact size depends on who is using the term but could vary from £100m up to £3bn. In the London market for example it would not refer to stocks in the FTSE …
MEDIAN
A way to calculate an average value, the median looks for the item in the middle of a sample. So if a share closes at the following prices over five days, £2, £2.10, £2.50, £3, £3.10, the median value is £2.50. READ MORE