This glossary of investment and related terms provides simple definitions of terms that you may need to know.

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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Margin:

The use of borrowed money to purchase securities (buying "on margin").

Market capitalization:

Number of common stock shares outstanding times share price. Provides a measure of firm size.

Market order:

An order placed with a broker to buy or sell a security at whatever the price may be when the order is executed.

Market risk:

The volatility of a stock price relative to the overall market or index as indicated by beta.

Market Timing:

The effort to base investment decisions on the anticipated direction of the market. If equities are expected to decline in price, the market timer may elect to hold a percentage of the portfolio in cash reserves or other fixed-income obligations. Timing may be based on fundamental or technical conditions, or a combination of these factors.

Maturity:

The length of time until the principal amount of a bond must be repaid.

MOABO:

Mother Of All Buying Opportunities

Money Market Fund

A common trust fund or mutual fund that aims to pay money market interest rates. This is accomplished by investing in safe, highly liquid securities, including bank certificates of deposit, commercial paper, U.S. government securities and repurchase agreements. Money funds make these high interest securities available to the average investor seeking immediate income and high investment safety

Money Purchase Pension Plan (MPPP):

A defined contribution plan in which employer contributions are usually determined as a percentage of pay. Forfeitures resulting from separation of service prior to full vesting can be used to reduce the employer's contributions or be reallocated among remaining employees.

Mutual Fund

An open-end investment company that buys back or redeems its shares at current net asset value. Most mutual funds continuously offer new shares to investors.

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NASDAQ

National Association of Securities Dealers Automated Quotations System. This is a computerized system that provides up-to-the-minute price quotations on about 5,000 of the more actively traded over-the-counter stocks.

Net Asset Value (NAV)

The current market worth of a mutual fund share. Calculated daily by taking the funds total assets securities, cash and any accrued earnings deducting liabilities, and dividing the remainder by the number of shares outstanding.

Nonqualified Plan:

A pension plan that does not meet the requirements for preferential tax treatment. This type of plan allows an employer more flexibility and freedom with coverage requirements, benefit structures, and financing methods.

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Odd lot:

A transaction involving fewer shares than in a "round" lot, which for most stocks is 100 shares.

Over-the-counter market:

A communications network through which trades of bonds, non-listed stocks, and other securities take place. Trading activity is overseen by the National Association of Securities Dealers (NASD).

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