< previous page page_368 next page > Page 368 less prevalent than monopoly. See also CARTEL; OLIGOPOLY; PERFECT COMPETITION. MONOPSONY situation in which one buyer dominates, forcing sellers to agree to the buyer's terms. For example, a tobacco grower may have no choice but to sell his tobacco to one cigarette company that is the only buyer for his product. The cigarette company therefore virtually controls the price at which it buys tobacco. The opposite of a monop-sony is a MONOPOLY. MONTHLY COMPOUNDING OF INTEREST see COMPOUND INTEREST. MONTHLY INVESTMENT PLAN plan whereby an investor puts a fixed dollar amount into a particular investment every month, thus building a position at advantageous prices by means of dollar cost averaging (see CONSTANT DOLLAR PLAN). MONTREAL EXCHANGE/BOURSE DE MONTREAL Canada's oldest stock exchange and second-largest in dollar value of trading. In 1996, the ME and its sister Canadian exchanges became the first in North America to introduce a decimal pricing system of trading and abandon the old "pieces of eight" system. Stocks, bonds, futures and options are traded through a specialist system combined with auto-mated systems, including the Electronic Order Book for registering market and limit orders; MORRE, an electronic order execution system; and Montreal Direct Access, which provides access to the Electronic Order Board through existing terminals for the trading desks of member firms. Futures trading is conducted by traditional open outcry. A system-to-system link between the Montreal Exchange (ME) and the BOSTON STOCK EXCHANGE (BSE) enables ME member firms to electronically route retail orders for U.S. securities directly to BSE for automatic execution and confirmation at the best prevailing price in the Intermarket Trading System. The Canadian Market Portfolio Index (XXM) tracks the market performance of the 25 highest capitalized stocks traded on at least two Canadian exchanges, and is the ME's main index. Trading hours are 9:30 A.M. to 4 P.M. EST, Monday through Friday; extended sessions of 8:15 A.M. to 9:15 A.M., and 4:15 P.M. to 5:15 P.M., are offered. In addition, six sector indices track banking, forest products, industrial products, mining and minerals, oil and gas and utilities. In the derivatives market, the exchange trades 10- year Government of Canada bond futures (CGB) and options (OGB) and 3-month Canadian bankers' acceptance (BAX) futures and options (OBX); 1-month Canadian bankers' acceptance futures (BAR) and 5-year Government of Canada bond futures (CGF); equity options and long-term equity options; Canadian bond options; and LEAPS. Futures are traded from 8 A.M. to 3 P.M.; options, from 8:20 A.M. to 4 P.M. Settlement for securities is the third business day following the trade date; for futures and options, it is the day after a transaction by direct payment to the Canadian Derivatives Clearing Corporation. < previous page page_368 next page > < previous page page_369 next page > Page 369 MOODY'S INVESTMENT GRADE rating assigned by MOODY'S INVESTORS SERVICE to certain municipal short-term debt securities, classified as MIG-1, 2, 3, and 4 to signify best, high, favorable, and adequate quality, respectively. All four are investment grade or bank quality. MOODY'S INVESTORS SERVICE headquartered with its parent company, Dun & Bradstreet, in downtown Manhattan, Moody's is one of the two best known bond rating agencies in the country, the other being Standard & Poor's. Moody's also rates commercial paper, preferred and common stocks, and municipal short-term issues. The six bound manuals it publishes annually, supplemented weekly or semiweekly, provide great detail on issuers and securities. The company also publishes the quarterly Moody's Handbook of Common Stocks, which charts more than 500 companies, showing industry group trends and company stock price performance. Also included are essential statistics for the past decade, an analysis of the company's financial background, recent financial developments, and the outlook. Moody's rates most of the publicly held corporate and municipal bonds and many Treasury and government agency issues, but does not usually rate privately placed bonds. MORAL OBLIGATION BOND tax-exempt bond issued by a municipality or a state financial intermediary and backed by the moral obligation pledge of a state government. (State financial intermediaries are organized by states to pool local debt issues into single bond issues, which can be used to tap larger investment markets.) Under a moral obligation pledge, a state government indicates its intent to appropriate funds in the future if the primary OBLIGOR, the municipality or intermediary, defaults. The state's obligation to honor the pledge is moral rather than legal because future legislatures cannot be legally obligated to appropriate the funds required. MORAL SUASION persuasion through influence rather than coercion, said of the efforts of the FEDERAL RESERVE BOARD to achieve member bank compliance with its general policy. From time to time, the Fed uses moral suasion to restrain credit or to expand it. MORGAN STANLEY CAPITAL INTERNATIONAL INDICES indices maintained and calculated by Morgan Stanley's Capital International group (MSCI) which track more than 45 equity markets throughout the world. The MSCI indices are market capitalization weighted and cover both developed and emerging markets. In addition to the country indices, MSCI also calculates aggregate indices for the world, Europe, North America, Asia, and Latin America. Most international mutual funds and other international institutional investors measure their performance against MSCI indices. MORNINGSTAR RATING SYSTEM system for rating open- and closed-end mutual funds and annuities by Morningstar Inc. of Chicago. The system rates funds from one to five stars, using a risk-adjusted performance rating in which performance equals total return of the fund. < previous page page_369 next page > < previous page page_370 next page > Page 370 The system rates funds assessing down-side risk, which is linked to the three-month U.S. Treasury bill. If a fund under performs the Treasury bill, it will lower the fund's rating. The score is plotted on a bell curve, and is applied to four distinct categories: all equities, fixed income, hybrids, municipals. The top 10% receive five stars; the top 22.5%, four stars; the top 35%, three stars; the bottom 22.5%, two stars; and the bottom 10%, one star. Morningstar is a subscription-based company, offering its ratings in binders, software, and CD-ROM form. It sells its data to America Online and Realities Telescan Analyzer and other databases, as well as metropolitan newspapers. Morningstar also sells information on U.S. equities and American Depositary Receipts (ADRs), but star ratings are not calculated for them. MORTGAGE debt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan. The borrower has use of the property, and the lien is removed when the obligation is fully paid. A mortgage normally involves real estate. For personal property, such as machines, equipment, or tools, the lien is called a chattel mortgage. See also ADLUSTABLE RATE MORTGAGE; CLOSED- END MORTGAGE; CONSOLIDATED MORTGAGE BOND; MORTGAGE BOND; OPEN-END MORTGAGE; VARIABLE RATE MORTGAGE. MORTGAGE-BACKED CERTIFICATE security backed by mortgages. Such certificates are issued by the FEDERAL HOME LOAN MORTGAGE CORPORATION, and the FEDERAL NATIONAL MORTGAGE ASSOCIATION. Others are guaranteed by the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION. Investors receive payments out of the interest and principal on the underlying mortgages. Sometimes banks issue certificates backed by CONVENTIONAL MORTGAGES, selling them to large institutional investors. The growth of mortgage-backed certificates and the secondary mortgage market in which they are traded has helped keep mortgage money available for home financing. See also PASS-THROUGH SECURITY. MORTGAGE-BACKED SECURITY see MORTGAGE-BACKED CERTIFICATE. MORTGAGE BANKER company, or individual, that originates mortgage loans, sells them to other investors, services the monthly payments, keeps related records, and acts as escrow agent to disperse funds for taxes and insurance. A mortgage banker's income derives from origination and servicing fees, profits on the resale of loans, and the spread between mortgage yields and the interest paid on borrowings while a particular mortgage is held before resale. To protect against negative spreads or mortgages that can't be resold, such companies seek commitments from institutional lenders or buy them from the FEDERAL NATIONAL MORTGAGE ASSOCIATION or the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION. Mortgage bankers thus play an important role in the flow of mortgage funds even though they are not significant mortgage holders. MORTGAGE BOND bond issue secured by a mortgage on the issuer's property, the lien on which is conveyed to the bondholders by a deed of < previous page page_370 next page > < previous page page_371 next page > Page 371 trust. A mortgage bond may be designated senior, underlying, first, prior, overlying, junior, second, third, and so forth, depending on the priority of the lien. Most of those issued by corporations are first mortgage bonds secured by specific real property and also representing unsecured claims on the general assets of the firm. As such, these bonds enjoy a preferred position relative to unsecured bonds of the issuing corporation. See also CONSOLIDATED MORTGAGE BOND; MORTGAGE. MORTGAGE BROKER one who places mortgage loans with lenders for a fee, but does not originate or service loans. MORTGAGE INTEREST DEDUCTION federal tax deduction for mortgage interest paid in a taxable year. Interest on a mortgage to acquire, construct, or substantially improve a residence is deductible for indebtedness of up to $1 million. In addition, interest on a home equity loan of up to $100,000 is deductible. These amounts are halved for married taxpayers filing separately. MORTGAGE LIFE INSURANCE policy that pays off the balance of a mortgage on the death of the insured. MORTGAGE POOL group of mortgages sharing similar characteristics in terms of class of property, interest rate, and maturity. Investors buy participations and receive income derived from payments on the underlying mortgages. The principal attractions to the investor are DIVERSIFICATION and LIQUIDITY, along with a relatively attractive yield. Those backed by government-sponsored agencies such as the FEDERAL HOME LOAN MORTGAGE CORPORATION, FEDERAL NATIONAL MORTGAGE ASSOCIATION, and GOVERNMENT NATIONAL MORTGAGE ASSOCIATION have become popular not only with individual investors but with life insurance companies, pension funds, and even foreign investors. MORTGAGE REIT invests in loans secured by real estate. These mortgages either may be originated and underwritten by the REAL ESTATE INVESTMENT TRUST or the REIT may purchase preexisting secondary mortgages. The funds the REIT invests may come from either shareholder equity capital or debt borrowed from other lenders. Mortgage REITs earn income from the interest they are paid and fees generated. This net income is generated from the excess of their interest and fee income and their interest expense and administrative fees. The other kind of real estate investment trustcalled an EQUITY REITtakes an ownership position in real estate, as opposed to acting as a lender. Some REITs, called hybrid REITs, take equity positions and make mortgage loans. MORTGAGE SERVICING administration of a mortgage loan, including collecting monthly payments and penalties on late payments, keeping track of the amount of principal and interest that has been paid at any particular time, acting as escrow agent for funds to cover taxes and insurance, and, if necessary, curing defaults and foreclosing when < previous page page_371 next page > < previous page page_372 next page > Page 372 a homeowner is seriously delinquent. For mortgage loans that are sold in the secondary market and packaged into a MORTGAGE-BACKED CERTIFICATE the local bank or savings and loan that originated the mortgage typically continues servicing the mortgages for a fee. MOSCOW INTERBANK CURRENCY EXCHANGE (MICEX) the most liquid and best organized financial exchange in Russia. MICEX was established in 1992 to handle currency transactions from the former Gosbank of the USSR. It is a closed joint-stock company with ownership spread among major Russian commercial banks and the Central Bank of Russia. The Central Bank owns 6%, while less than 0.5% is held by the Association of Russian Banks, the Government of Moscow, and the Ministry of Finance of the Russian Federation. The rest of the shares are evenly split among 30 Russian and CIS banks. MICEX offers four market divisions which operate separately: electronic markets in foreign currencies, government securities, company shares and derivatives. Seven regional exchanges are linked to the MICEX trading and depositary system; some 1,000 remote terminals are connected to the MICEX government securities trading system either directly or through regional trading floors. The MICEX Settlement House provides settlement services for the four divisions. The exchange trades 10 foreign currencies, including the larger CIS currencies. The MICEX Derivatives Division, launched in 1996, trades cash-settled futures on the U.S. dollar, Russian T-bill (GKO), MICEX Composite Stock Index and deliverable futures on individual Russian stocks. Some 20 members trade derivatives in the trading hall. The exchange's trading system, developed by Computershare Systems of Australia, enables traders to trade GKOs and stocks alongside GKO futures, deliverable stock futures, and MICEX Composite Index futures. Trading hours are 11 A.M. to 3 P.M. MOST ACTIVE LIST stocks with the most shares traded on a given day. Unusual VOLUME can be caused by TAKEOVER activity, earnings releases, institutional trading in a widely held issue, and other factors. MOVING AVERAGE average of security or commodity prices constructed on a period as short as a few days or as long as several years and showing trends for the latest interval. For example, a thirty-day moving average includes yesterday's figures; tomorrow the same average will include today's figures and will no longer show those for the earliest date included in yesterday's average. Thus every day it picks up figures for the latest day and drops those for the earliest day See chart on the next page. MOVING AVERAGE CONVERGENCE/DIVERGENCE (MACD) TECHNICAL ANALYSIS oscillator developed by Gerald Appel that measures OVERBOUGHT and OVERSOLD conditions. MACD, informally called ''MacD," uses three exponential MOVING AVERAGES: a short one, a long one, and a third that plots the moving average of the difference < previous page page_372 next page > < previous page page_373 next page > Page 373 between the other two and forms a signal line on an MACD graph. (MACD is usually shown as a histogram, which plots the difference between the signal line and the MACD line). Trend reversals are signaled by the convergence and divergence of these moving averages. A positive BREAKOUT occurs when the histogram crosses the zero line upward (a buy signal) and a negative breakout occurs when the histogram crosses the zero (equilibrium) line downward (a sell signal). One of the most popular MACDs is the 8/17/9 MACD. On a daily MACD, the short moving average would be 8 days, the long one 17 days, and the signal line 9 days. On a weekly MACD, the same numbers would refer to weeks instead of days. The weekly MACD over-rides chatter (see WHIPSAWED) and is a better indicator of how strongly the market feels about a stock and how likely it is the current trend will continue. See also MOMENTUM INDICATORS. MTN initials standing for medium-term notes that are issued by corporations and distributed by investment banks acting as agents, similar to shorter-term COMMERCIAL PAPER. MUD acronym for municipal utility district, a political subdivision that provides utility-related services and may issue SPECIAL ASSESSMENT BONDS. MULTINATIONAL CORPORATION corporation that has production facilities or other fixed assets in at least one foreign country and makes its major management decisions in a global context. In marketing, production, research and development, and labor relations, its decisions must be made in terms of host-country customs and traditions. In finance, many of its problems have no domestic counterpartthe payment of dividends in another currency, for example, or the need to shelter working capital from the risk of devaluation, or the choices between owning and licensing. Economic and legal questions must be dealt with in drastically different ways. In addition to foreign exchange risks and the special business risks of operating in unfamiliar environments, < previous page page_373 next page > < previous page page_374 next page > Page 374 there is the specter of political riskthe risk that sovereign governments may interfere with operations or terminate them altogether. MULTIPLE see PRICE-EARNINGS RATIO. MULTIPLE LISTING listing agreement used by a broker who is a member of a multiple-listing organization that is an exclusive right to sell with an additional authority and obligation on the part of the listing broker to distribute the listing to other brokers in the organization. These listings then are distributed in a multiple-listing service publication. Generally, the listing broker and the selling broker will split the commission, but terms for division can vary. A multiple-listing agreement benefits the seller by exposing his property to a wider group of potential buyers than would be available from one exclusive broker, which should allow the sale to be completed more quickly, and for a higher price. The multiple-listing service, however, has come under close scrutiny by consumer groups and justice departments for alleged antitrust practices. MULTIPLE PERIL INSURANCE policy that incorporates several different types of property insurance coverage, such as flood, fire, wind, etc. In its broadest application, the term is synonymous with all-risks insurance, which covers loss or damage to property from fortuitous circumstances not specifically excluded from coverage. Do not confuse multiple peril insurance with multiple protection insurance, which is a form of life insurance policy combining features of term and whole life insurance. MULTIPLIER the multiplier has two major applications in finance and investments. 1. investment multiplier or Keynesian multiplier: multiplies the effects of investment spending in terms of total income. An investment in a small plant facility, for example, increases the incomes of the workers who built it, the merchants who provide supplies, the distributors who supply the merchants, the manufacturers who supply the distributors, and so on. Each recipient spends a portion of the income and saves the rest. By making an assumption as to the percentage each recipient saves, it is possible to calculate the total income produced by the investment. 2. deposit multiplier or credit multiplier: magnifies small changes in bank deposits into changes in the amount of outstanding credit and the money supply. For example, a bank receives a deposit of $100,000, and the RESERVE REQUIREMENT is 20%. The bank is thus required to keep $20,000 in the form of reserves. The remaining $80,000 becomes a loan, which is deposited in the borrower's bank. When the borrower's bank sets aside the $16,000 required reserve out of the $80,000, $64,000 is available for another loan and another deposit, and so on. Carried out to its theoretical limit, the original deposit of $100,000 could expand into a total of $500,000 in deposits and $400,000 in credit. < previous page page_374 next page > < previous page page_375 next page > Page 375 MUNICIPAL BOND debt obligation of a state or local government entity. The funds may support general governmental needs or special projects. Prior to the TAX REFORM ACT OF 1986, the terms municipal and tax- exempt were synonymous, since virtually all municipal obligations were exempt from federal income taxes and most from state and local income taxes, at least in the state of issue. The 1986 Act, however, divided municipals into two broad groups: (1) PUBLIC PURPOSE BONDS, which remain tax-exempt and can be issued without limitation, and (2) PRIVATE PURPOSE BONDS, which are taxable unless specifically exempted. The tax distinction between public and private purpose is based on the percentage extent to which the bonds benefit private parties; if a tax- exempt public purpose bond involves more than a 10% benefit to private parties, it is taxable. Permitted private purpose bonds (those specified as tax-exempt) are generally TAX PREFERENCE ITEMS in computing the ALTERNATIVE MINIMUM TAX, and effective August 15, 1986, are subject to volume caps. See also ADVANCE REFUNDING; GENERAL OBLIGATION BOND; HOSPITAL REVENUE BOND; INDUSTRIAL DEVELOPMENT BOND; LIMITED TAX BOND; MUNICIPAL INVESTMENT TRUST; MUNICIPAL REVENUE BOND; SINGLE STATE MUNICIPAL BOND FUND; SPECIAL ASSESSMENT BOND; TAXABLE MUNICIPAL BOND; TAX-EXEMPT SECURITY; UNDERLYING DEBT; YIELD BURNING. MUNICIPAL BOND INSURANCE policies underwritten by private insurers guaranteeing municipal bonds in the event of default. The insurance can be purchased either by the issuing government entity or the investor; it provides that bonds will be purchased from investors at par should default occur. Such insurance is available from a number of large insurance companies, but a major portion is written by the following "monoline" companies, so-called because their primary business is insuring municipal bonds: AMBAC Idemnity Corporation (AMBAC); Capital Guaranty Insurance Company (CGIC); Connie Lee Insurance Company; Financial Guaranty Insurance Company (FGIC); Financial Security Assurance, Inc. (FSA); and Municipal Bond Investors Assurance Corporation (MBIA). Insured municipal bonds generally enjoy the highest rating resulting in greater marketability and lower cost to their issuers. From the investor's standpoint, however, their yield is typically lower than similarly rated uninsured bonds because the cost of the insurance is passed on by the issuer to the investor. Some unit investment trusts and mutual funds feature insured municipal bonds for investors willing to trade marginally lower yield for the extra degree of safety. MUNICIPAL IMPROVEMENT CERTIFICATE certificate issued by a local government in lieu of bonds to finance improvements or services, such as widening a sidewalk, or installing a sewer, or repairing a street. Such an obligation is payable from a special tax assessment against those who benefit from the improvement, and the payments may be collected by the contractor performing the work. Interest on the certificate is usually free of federal, state, and local taxes. See also GENERAL OBLIGATION BOND. < previous page page_375 next page > < previous page page_376 next page > Page 376 MUNICIPAL INVESTMENT TRUST (MIT) UNIT INVESTMENT TRUST that buys municipal bonds and passes the tax-free income on to shareholders. Bonds in the trust's portfolio are normally held until maturity, unlike the constant trading of bonds in an open-ended municipal bond fund's portfolio. MITs are sold through brokers, typically for a sales charge of about 3% of the principal paid, with a minimum investment of $1000. The trust offers diversification, professional management of the portfolio, and monthly interest, compared with the semiannual payments made by individual municipal bonds. Many MITs invest in the securities of just one state. For California residents who buy a California-only MIT, for example, all the interest is free of federal, state, and local taxes. In contrast, a Californian who buys a national MIT might have to pay state and local taxes on interest derived from out-of-state bonds in the trust's portfolio. MUNICIPAL NOTE in common usage, a municipal debt obligation with an original maturity of two years or less. MUNICIPAL REVENUE BOND bond issued to finance public works such as bridges or tunnels or sewer systems and supported directly by the revenues of the project. For instance, if a municipal revenue bond is issued to build a bridge, the tolls collected from motorists using the bridge are committed for paying off the bond. Unless otherwise specified in the indenture, holders of these bonds have no claims on the issuer's other resources. MUNICIPAL SECURITIES RULEMAKING BOARD see SELF-REGULATORY ORGANIZATION. MUTILATED SECURITY certificate that cannot be read for the name of the issue or the issuer, or for the detail necessary for identification and transfer, or for the exercise of the holder's rights. It is then the seller's obligation to take corrective action, which usually means having the transfer agent guarantee the rights of ownership to the buyer. MUTUAL ASSOCIATION SAVINGS AND LOAN ASSOCIATION organized as a cooperative owned by its members. Members' deposits represent shares; shareholders vote on association affairs and receive income in the form of dividends. Unlike state-chartered corporate S&Ls, which account for a minority of the industry, mutual associations are not permitted to issue stock, and they are usually chartered by the OFFICE OF THRIFT SUPERVISION (OTS) and belong to the SAVINGS ASSOCIATION INSURANCE FUND (SAIF). Deposits are technically subject to a waiting period before withdrawal, although in practice withdrawals are usually allowed on demand. MUTUAL COMPANY corporation whose ownership and profits are distributed among members in proportion to the amount of business they do with the company. The most familiar examples are (1) mutual < previous page page_376 next page > < previous page page_377 next page > Page 377 insurance companies, whose members are policy holders entitled to name the directors or trustees and to receive dividends or rebates on future premiums; (2) state-chartered MUTUAL SAVINGS BANKS, whose members are depositors sharing in net earnings but having nothing to do with management; and (3) federal savings and loan associations, MUTUAL ASSOCIATIONS whose members are depositors entitled to vote and receive dividends. MUTUAL EXCLUSION DOCTRINE doctrine which established that interest from municipal bonds is exempt from federal taxation. In return for this federal tax exemption, states and localities are not allowed to tax interest generated by federal government securities, such as Treasury bills, notes, and bonds. MUTUAL FUND fund operated by an INVESTMENT COMPANY that raises money from shareholders and invests it in stocks, bonds, options, futures, currencies, or money market securities. These funds offer investors the advantages of diversification and professional management. A management fee is charged for these services, typically between 0.5% and 2% of assets per year. Funds also levy other fees such as 12B-1 FEES, EXCHANGE FEES and other administrative charges. Funds that are sold through brokers are called LOAD FUNDS, and those sold to investors directly from the fund companies are called NO-LOAD FUNDS. Mutual fund shares are redeemable on demand at NET ASSET VALUE by shareholders. All shareholders share equally in the gains and losses generated by the fund. Mutual funds come in many varieties. Some invest aggressively for capital appreciation, while others are conservative and are designed to generate income for shareholders. Investors need to assess their tolerance for risk before they decide which fund would be appropriate for them. In addition, the timing of buying or selling depends on the outlook for the economy, the state of the stock and bond markets, interest rates, and other factors. MUTUAL FUND CASH-TO-ASSETS RATIO amount of mutual fund assets held in cash instruments. A fund manager may choose to keep a large cash position if he is bearish on the stock or bond market, or if he cannot find securities he thinks are attractive to buy. A large cash position (10% or more of the fund's assets in liquid instruments) may also accumulate if many investors buy fund shares and the fund manager cannot put all the money to work at once. On the other hand, a low cash-to-assets ratio is an indication that the fund manager is bullish, because he is fully invested and expects stock or bond prices to rise. Some analysts consider this ratio to be an important indicator of bullish or bearish sentiment among sophisticated investment managers. If many fund managers are increasing their cash positions, the fund managers are becoming more bearishthough some analysts consider it bullish for the market because the managers will have more cash to buy securities. The ratio for the entire mutual fund industry is < previous page page_377 next page > [...]... government and investors on matters of common interest, (4) establish and enforce fair and equitable rules of securities trading, and (5) establish a disciplinary body capable of enforcing the above provisions The NASD also requires members to maintain quick assets in excess of current liabilities at all times Periodic examinations and audits are conducted to ensure a high level of solvency and financial... contract NET INVESTMENT INCOME PER SHARE income received by an investment company from dividends and interest on securities investments during an accounting period, less management fees and administrative expenses and divided by the number of outstanding shares Short-term trading profits (net profits from securities held for less than six months) are considered dividend income The dividend and interest... requirements of SEC Regulation D Under Rules 505 and 5 06 of Regulation D, an investment can be offered to a maximum of 35 nonaccredited investors Such investors tend to be wealthy and sophisticated, and therefore the SEC feels they need less investor protection than smaller, less sophisticated investors NONCALLABLE preferred stock or bond that cannot be redeemed at the option of the issuer A bond may offer... dis-position of property, from a loan, or from the sale or issuance of securities after deduction of all costs incurred in the transaction In computing the gain or loss on a securities transaction for tax purposes, the amount of the sale is the amount of the net proceeds NET PROFIT see NET INCOME NET PROFIT MARGIN NET INCOME as a percentage of NET SALES A measure of operating efficiency and pricing... net profit before extraordinary items and taxes that is, net sales less COST OF GOODS SOLD and SELLING, GENERAL, AND ADMINISTRATIVE (SG&A) EXPENSES NET QUICK ASSETS cash, MARKETABLE SECURITIES, and ACCOUNTS RECEIVABLE, minus current liabilities See also QUICK RATIO NET REALIZED CAPITAL GAINS PER SHARE amount of CAPITAL GAINS that an investment company realized on the sale of securities, net of CAPITAL... indication of a new high with a letter "u" or a new low with the letter "d." Newspapers publish the total number of new highs and new lows each day on the New York and American Stock Exchanges and on the NASDAQ Stock Market Technical analysts pay great attention to the trend of new highs and new lows If the number of new highs is expanding, that is considered a bullish indicator If the number of new lows... cotton, frozen concentrated orange juice and potatoes, as well as an array of interest rate, currency and index futures and options through two subsidiaries NYCE and the COFFEE, SUGAR & COCOA EXCHANGE merged in 1998, with each exchange retaining its identity and derivative products but operating under a newly-created holding company, the Board of Trade of the City of New York The FINEX division was created... sponsorship of the Investment Bankers' Conference and the Securities and Exchange Commission to comply with the MALONEY ACT NASD members include virtually all investment banking houses and firms dealing in the OVER THE COUNTER market Operating under the supervision of the SEC, the NASD's basic purposes are to (1) standardize practices in the field, (2) establish high moral and ethical standards in securities... with a member of the National Association of Securities Dealers as defined in their rules of fair practice It is used to test the bona fide PUBLIC OFFERINGS requirement that applies to the allocation of a HOT ISSUE If the buying customer has a history of purchasing similar amounts in normal circumstances, the sale qualifies as a bona fide public offering and is not in violation of the Rules of Fair Practice... through a BROKER, as is done in load funds Many no-load fund families (see FAMILY OF FUNDS) allow switching of assets between stock, bond, and money market funds The listing of the price of a no-load fund in a newspaper is accompanied with the designation NL The net asset value, market price, and offer prices of this type of fund are exactly the same, since there is no sales charge See also LOAD FUND . banks and the Central Bank of Russia. The Central Bank owns 6% , while less than 0.5% is held by the Association of Russian Banks, the Government of Moscow, and the Ministry of Finance of the. that pays off the balance of a mortgage on the death of the insured. MORTGAGE POOL group of mortgages sharing similar characteristics in terms of class of property, interest rate, and maturity and development, and labor relations, its decisions must be made in terms of host-country customs and traditions. In finance, many of its problems have no domestic counterpartthe payment of