M

Margin - The value of securities and cash in a brokerage account that an investor may borrow against in order to buy more securities.

Margin Call - A request by a broker for additional cash in order to bring the equity in a customer's margin account up to the margin maintenance requirements that the stock exchange sets.

Market Capitalization - The market price of an entire company, calculated by multiplying the number of shares outstanding by the price per share.

Market Order - A buy or sell order in which the broker is to execute the order at the best price currently available. Also called at the market. These are often the lowest-commission trades because they involve very little work by the broker.

Market Risk - The risk that an overall decline in the stock market will have a negative impact on the securities you own. The decline in value can be dramatic and possibly last for some time. Although the companies in which you are invested may be doing well, if there is a general decline in stock prices your shares may decline in value anyway. It is difficult to avoid the impact that a widespread drop in the market can have on individual stocks.

Maturity Date - The date upon which the contract must be annuitized. Some insurance companies strictly enforce the maturity date, requiring that the annuitant select a specific payout option or surrender the contract. Other insurance companies notify the annuitant that the contract has reached its maturity date but allow the annuitant to maintain the contract as a deferred annuity and do not force annuitization.

Medium-Term Bonds - Bonds that have remaining maturities of 3 to 10 years.

Mid Cap Funds - Mutual funds that primarily invest in stocks of corporations with a market capitalization greater than $1 billion but less than $5 billion

Minimum Rate Guarantee - The minimum fixed interest rate an insurance company pays on the cash value of a policy. The minimum rate guaranteed is stated in the insurance contract. Insurance companies are required by state law to pay a certain minimum guaranteed rate.

Modified Endowment Contract - A category of life insurance contract created by legislation passed by Congress in 1988. A policy becomes a Modified Endowment Contract (MEC) when premiums are paid into the contract in excess of the so-called seven-pay test. The purpose of the law is to discourage policyholders from making very large premium payments during the first seven years of the contract in order to create a "paid-up" policy. When a contract becomes an MEC, a policy loan may be taxable and subject to penalties. Partial surrenders of MECs are treated as first being a taxable distribution of earnings rather than a non-taxable return of premium. Taxable distributions from a MEC taken prior to the owner's age 59-1/2 may also be subject to an Internal Revenue Code penalty of 10%.

Money Market - The market for borrowing and lending large amounts of short-term funds. Money-market instruments include notes, negotiable certificates of deposit, Treasury bills, and the like.

Money Market Accounts - Federally insured accounts (with banks and other financial institutions) that pay rates established by the bank based upon money-market yields. Money Market Mutual Funds, however, are similar to Money Market accounts but are not federally insured.

Money Market Deposit Accounts - A highly liquid account offered by banks that typically provides a higher interest rate than that of a savings account. The account is FDIC insured and its rate of interest is usually sensitive to changes in market rates.

Money Market Funds - Mutual funds that invest in money-market instruments.

Money Market Mutual Fund - An open-end mutual fund which invests only in cash or cash equivalents. The fund's net asset value remains a constant $1 per share, although not guaranteed, and the interest rate fluctuates with the market.

Morningstar - A mutual fund and variable annuity research and reporting company.

Mortality Cost - The amount of money the insurance company charges (usually monthly) for providing the death benefit in a universal life policy or a variable universal life policy.

Mortgage Securities - Securities, usually bonds, that are backed by a pool of mortgages. The interest and principal payments are passed through to investors each month.

Municipal Bonds - A bond issued by a state, a municipality, or a state agency or authority for the purpose of funding some governmental function, which pays interest that is exempt from federal income tax.

Municipal Bond Fund- A mutual fund that invests primarily in bonds and debt securities issued by states or municipalities. The objective of most municipal bond funds is to provide current income that is exempt from federal income taxes while protecting the principal from decreasing in value. Both the net asset value and the monthly income can fluctuate with changes in interest rates.

Mutual Fund - An investment company that enables its shareholders to pool their funds for professional management as a single investment account.