M to Q

M | N | O | P | Q


Management company

Firm that is responsible for mutual fund portfolio investments and/or fund management. The firm's remuneration is based on a percentage of the fund's total assets.

Management expense ratio (MER)

Important variable that measures a fund's total management fees and is expressed as a percentage of the fund's total average assets.

Management fees

The fees charged by a manager or investment adviser for portfolio management and operations of a fund. The fees are generally based on a fixed percentage of the fund's net asset value.


See investment adviser.


An investment strategy used to offset or reduce the risks associated with future fluctuations in prices, interest rates and exchange rates.


The amount or security a client deposits with a brokerage firm that represents a portion of the price of securities or commodities bought on margin. The brokerage firm advances the balance of the agreed-upon price to the client.

Marginal tax rate

Tax rate applied to the last level of a taxpayer's income.

Market capitalization

The total value of a corporation's outstanding stock that is owned by investors. The market capitalization of a corporation that has issued 10 million shares that are trading at $10 each is therefore $100 million ($10 X 10 million shares).

Market maker

Authorized trader who is employed by a securities firm and required by applicable self-regulatory agencies to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities.

Market price

Price at which a security would likely be sold in an open marketplace.

Market risk

Market risk corresponds to stock market fluctuations. It is particularly marked in the short term, when market fluctuations have a large impact on investment value. The impact of these fluctuations on your investments lessens over the long term.

Market value

Agreed-upon price by two rational and willing parties. Serves as an asset valuation standard in the event of a possible sale.


Date on which a bond, debenture or loan becomes due and payable.

Money market

Part of the financial market where short-term instruments such as Treasury bills, commercial paper and banker's acceptances are traded.

Money market fund

Mutual fund that invests primarily in Treasury bills and other short-term securities that carry little risk.

Money supply

M-1: The narrowest and most common definition is the sum of all coins and bank notes in circulation, demand deposits held by banks and other financial institutions and all traveller's cheques.
M-2: Corresponds to M-1 plus all savings deposits, money market funds and certain bank reserves.
M-3: Corresponds to M-2 plus large-denomination term deposits (for the most part held by corporations) and certain additional reserves held by financial institutions.

Monetary policy

Policy adopted by the federal government, through the Bank of Canada, to control credit and money supply.

Mortgage fund

Mutual fund that invests in mortgage loans. Its portfolio is generally made up of first mortgage loans on residential properties in Canada, although some funds also invest in commercial mortgage loans.


Index that includes approximately 1,100 stocks from companies in 20 industrialized countries in the Far East, Australasia and Europe. The index does not include North American stocks.

MSCI Europe Index

Index that tracks the performance of the largest corporations in 15 European countries.

MSCI Japan Index

Index that tracks the performance of the largest corporations in Japan's eight major economic sectors.

MSCI Pacific excl. Japan Index

Index that tracks the performance of the largest corporations in the Pacific region, excluding Japan. The countries included in the index are Australia, Malaysia, China (Hong Kong), Singapore and New Zealand.

MSCI World Index

Index based on a sample of approximately 1,600 stocks in 22 industrialized countries.

Mutual fund company

See investment company.

Mutual fund

See investment company.


Nesbitt Burns Preferred Stock Index

Index that contains a sample of 50 preferred stocks representing large Canadian corporations.

Nesbitt Burns Small Cap Index

Index based on a sample of 400 stocks representing Canadian corporations with a market capitalization under $1 billion.

Net asset value (NAV)

In a mutual fund (set up as a trust or a corporation), NAV is the total value of all the assets, determined daily based on the market value of the portfolio, less all liabilities. Also called net worth or net assets.

Net asset value per share (NAVPS)

The net asset value of a mutual fund divided by the number of outstanding units or shares. NAVPS is the basic value of a unit or share.

Nominal interest rate

Annual interest rate stipulated in a contract for a coupon bond issue.

Nominal value

Value of a bond or a debenture as given on the certificate. The nominal value generally represents the amount repaid to the investor upon maturity.


Odd lot

Number of shares traded that is less than a round lot.


Right to buy or sell securities or property at an agreed-upon price and for a specified period.

Over the counter

Said of transactions on securities not listed on an organized exchange.

Over-the-counter market

See over the counter.

Owners' equity (equity capital)

Balance sheet item that represents asset ownership less external liabilities. Owner's equity is the total portion of a corporation belonging to the owners.


Par value

Value attributed to a bond or a share. The par value of a common share generally has little relation to its price, and "no-par-value" shares are now common. The par value of a preferred share is significant, since it indicates the amount each preferred share will represent in the event of liquidation.

Pension adjustment

Amount calculated based on the contributions made or benefits earned during the year under an employer pension plan. The pension adjustment enables taxpayers to calculate the amount they can contribute to an RRSP in addition to contributions to a registered pension plan.

Periodic payment plan (contractual plan)

See dollar cost averaging.


Total securities held by a mutual fund company, an individual investor or a corporation.

Preauthorized transfer plan

Investment plan that authorizes automatic withdrawals from a bank account.

Preferred share

Share of a corporation that pays a set dividend ahead of common shareholders and, in the event of liquidation, entitles the holder to a fixed amount. Preferred shares do not ordinarily carry voting rights unless a stipulated dividend amount has not been paid.

Preliminary prospectus

Prospectus that does not include all the information contained in the final prospectus and is used to assess public interest in the issue while it is being reviewed by the securities commission.


1. Amount by which a bond sells above its par value.
2. Amount paid to maintain an insurance policy.

Present value

Today's value of an amount payable in the future.

Price (market)

Last price at which a security was sold.

Price/earnings multiple (price/earnings ratio)

Price of a common stock divided by net earnings per share from the latest year.

Primary market

Market for new issues of securities that are offered to investors for the first time. Capital users such as corporations and governments draw on the primary market for capital.

Prime rate

Interest rate charged by a chartered bank to its most creditworthy customers.


The person for whom a broker carries out a trade.


Economic production per worker.


Legal document that sets forth the details about securities issued to the public by a business corporation or other legal entity.

Public offering

An issuer's stock offering to the public.

Purchasing power

The volume of goods and services that a certain amount of money can buy.

Put and call options

A put option gives the buyer the right to sell a product, and a call option gives the buyer the right to buy a product. Put options are generally bought by investors who expect the price of the product to fall, and call options are bought by investors who expect the price to increase. Call and put options are available for stocks, bonds, currencies, precious metals, commodities and stock indexes.


Quantitative analysis

Analysis of trends in respect of economic variables and securities designed to identify and benefit from disparities.