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Nasdaq 100 Index: Overview, Structure, and How to Invest Key takeaways * The Nasdaq-100 Index tracks the 100 largest nonfinancial companies listed on the Nasdaq exchange. * Components include common stocks, ordinary shares, American depositary receipts (ADRs) and tracking stocks, provided they meet listing and liquidity criteria. * The index uses a modified market-capitalization method…

Nasdaq — Overview, History, Structure, Indexes, and Impact What is Nasdaq? Nasdaq is a global electronic stock exchange and market technology company. Launched in 1971 as the first automated stock market, it transformed trading by replacing the traditional specialist model with a computerized quotation and execution system. Today Nasdaq lists more than 5,000 companies and…

Narrow Money Narrow money refers to the most liquid forms of money used as a medium of exchange in an economy. It includes physical currency (notes and coins) and the funds in deposit accounts that are immediately accessible for transactions. Key components Physical currency in circulation (notes and coins), often called M0. Demand deposits and…

Nanny Tax: Overview The “nanny tax” refers to federal employment taxes that apply when you hire household help and pay wages above certain thresholds. The IRS treats ongoing household workers—such as nannies, babysitters, cooks, butlers, and similar staff—as employees rather than independent contractors. That classification makes you a household employer responsible for Social Security, Medicare,…

Named Perils Insurance Policy: What It Is and How It Works What is a named perils policy? A named perils insurance policy covers losses to property only from the specific hazards listed in the policy. If a peril is not named, damage from that cause is not covered. Named perils policies are often less expensive…

Named Beneficiary: Overview, Types, and Considerations What is a named beneficiary? A named beneficiary is the person, group, organization, or estate designated in a legal document to receive assets from a financial account or arrangement—such as a trust, life insurance policy, pension, IRA, or annuity—when the owner dies. Assets paid to a named beneficiary typically…

Naked Short Selling Explained Naked short selling is the practice of selling shares without first borrowing them or ensuring they can be borrowed. Unlike a conventional short sale—where the seller borrows shares, sells them, and later buys them back to return—naked shorting skips the borrowing step. That creates the risk of “fails to deliver” and…

Naked Put (Uncovered / Short Put) What it is A naked put (also called an uncovered or short put) is an options strategy in which an investor sells put options without holding any offsetting position in the underlying security. The seller receives the option premium and is obligated to buy the underlying at the option’s…

Naked Options A naked (or uncovered) option is an option sold by a trader who does not own the underlying asset or the cash needed to satisfy the option’s obligation. Selling a naked option creates a binding obligation at expiration: for a call, to deliver shares at the strike price; for a put, to buy…

Naked Call Options: How They Work, Risks, and Risk Management What is a naked call? A naked (or uncovered) call is an options strategy in which an investor sells (writes) call options without owning the underlying security. The seller receives the option premium up front and hopes the option expires worthless. Unlike a covered call,…

Nacha: Steward of the U.S. ACH Network What is Nacha? Nacha is a nonprofit organization that governs the Automated Clearing House (ACH) Network, the electronic system that moves money and payment-related information between U.S. bank accounts. Funded by the financial institutions that use the network, Nacha establishes the rules, standards, and quality controls that enable…

Mutually Exclusive — Meaning and Practical Use Definition Mutually exclusive events or options cannot occur or be chosen at the same time. If one happens, the other cannot. Key takeaways * Mutually exclusive choices require selecting one option to the exclusion of others. * In business and finance, this concept guides project selection and capital…

Mutual Insurance Company Definition A mutual insurance company is an insurer owned by its policyholders rather than external shareholders. Its primary purpose is to provide insurance coverage at or near cost and return excess earnings to members as dividends or reduced premiums. How it works Policyholders are the owners. They may receive dividends or premium…

Mutual Funds What is a mutual fund? A mutual fund pools money from many investors to buy a diversified portfolio of securities—stocks, bonds, money-market instruments, or a mix. A professional manager or a set of investment rules runs the fund according to its stated objective. Each investor owns shares of the fund and shares in…

Mutual Company: Definition and Overview A mutual company is a private, member-owned firm in which the customers (often called policyholders or members) are also the owners. Profits are shared with members, typically through cash dividends or by reducing premiums. Mutual companies are commonly structured as cooperatives and are most often found in the insurance industry,…

Musharakah: Partnership-Based Financing in Islamic Finance Musharakah is a partnership-based financing method used in Islamic finance that replaces interest-based lending with shared investment, profit, and loss. Under Sharia law, financiers cannot earn money from interest; instead, they participate as partners who share the actual business outcomes according to pre-agreed ratios. How Musharakah Works Partners contribute…

Murabaha Murabaha is a Sharia-compliant form of financing commonly described as cost-plus or markup-based financing. Instead of lending money and charging interest (riba), an Islamic bank buys an asset and resells it to the customer at the original cost plus an agreed profit margin. The customer repays the bank in fixed installments, and legal ownership…

Municipal Securities Rulemaking Board (MSRB) Overview The Municipal Securities Rulemaking Board (MSRB) is the primary rulemaking body for the U.S. municipal securities market. As a self-regulatory organization (SRO) operating under Securities and Exchange Commission (SEC) oversight, the MSRB sets standards and transparency requirements for firms and banks involved in issuing, underwriting, trading, and selling municipal…

Municipal Bond: Definition, Types, Risks, and Tax Benefits What is a municipal bond? A municipal bond (muni) is a debt security issued by state, county, or local governments—or by agencies acting on their behalf—to raise capital for public projects such as schools, highways, water and sewer systems, and parks. Investors who buy municipal bonds are…

Mumbai Interbank Offered Rate (MIBOR) The Mumbai Interbank Offered Rate (MIBOR) was the reference rate at which Indian banks offered to lend funds to other banks. It served as a benchmark for money-market transactions and short-term lending in India, covering tenors from overnight up to three months. How MIBOR worked Calculated daily by the National…

Multiplier Effect: Definition and Key Ideas The multiplier effect describes how an initial change in spending or investment leads to a larger change in total income or output. It measures how economic activity is amplified as money circulates through an economy. The size of the multiplier depends on how much of any additional income is…

Multiplier: What It Means in Finance and Economics Definition A multiplier is a factor that amplifies or reduces the effect of a change in one variable on related variables. In economics and finance it commonly describes how an initial change—such as government spending, investment, or bank lending—produces a larger (or smaller) change in aggregate income,…

Multiples Approach What it is The multiples approach is a relative valuation method that values a company by comparing financial ratios (multiples) of similar firms. The core assumption is that comparable companies should trade at similar multiples of earnings, sales, or cash flow. Analysts use these multiples to estimate a target company’s value by applying…

Multiple Listing Service (MLS) A Multiple Listing Service (MLS) is a cooperative database used by real estate professionals to list and share properties for sale within a specific region. Created and maintained by local brokers and agents, MLSs consolidate detailed, up-to-date listing information—making it easier for agents to find matches for buyers and to market…

Multiple Linear Regression (MLR) Multiple linear regression (MLR) models the relationship between one dependent (response) variable and two or more independent (explanatory) variables. It estimates how each predictor contributes to the outcome while holding the other predictors constant. MLR formula For observation i (i = 1,…,n): yi = β0 + β1 xi1 + β2 xi2…

Multiple Employer Welfare Arrangement (MEWA) Key takeaways * A MEWA lets two or more employers pool contributions to provide health and other welfare benefits to their employees. * MEWAs help smaller employers access group-rate benefits and share administrative costs and risk. * They are regulated by federal ERISA rules and often by state insurance authorities;…

Understanding Financial Multiples: Types and How to Calculate Them A multiple is a ratio that compares one financial metric to another to evaluate a company’s valuation or financial health. Multiples are widely used to compare companies within the same industry and to identify whether a company appears overvalued or undervalued relative to peers. Key takeaways…

Multinational Corporation: History, Characteristics, and Types What is a multinational corporation (MNC)? A multinational corporation (MNC) is a company headquartered in one country that owns or controls business operations in one or more other countries. These operations can take the form of subsidiaries, branches, manufacturing plants, sales offices, or joint ventures. MNCs generate revenue across…

Multilevel Marketing: How it Works, Risks, and Red Flags What is multilevel marketing (MLM)? Multilevel marketing (MLM), also called network marketing or direct selling, is a business model in which independent distributors sell products directly to consumers and recruit others to join. Distributors earn from personal retail sales and from commissions or bonuses based on…

Understanding Multilateral Trading Facilities (MTF): A Complete Guide Multilateral Trading Facilities (MTFs) are electronic trading venues that match buy and sell orders for financial instruments outside traditional national exchanges. Common in Europe under the MiFID II framework, MTFs are typically operated by market operators, banks, or data firms and enable faster, lower‑cost, and more transparent…

Multilateral Investment Guarantee Agency (MIGA): Overview and History What is MIGA? MIGA is a member of the World Bank Group that promotes foreign direct investment (FDI) into developing countries by providing political risk insurance and credit enhancement. Its mission is to encourage investment that supports economic growth, poverty reduction, and development outcomes. Key takeaways *…

Understanding Multilateral Development Banks: Types and Key Examples What is a multilateral development bank (MDB)? A multilateral development bank (MDB) is an international financial institution created by multiple countries to promote economic development and reduce poverty in low- and middle-income nations. Unlike commercial banks, MDBs prioritize long-term development goals over profit, offering low- or no-interest…

Multicollinearity Explained: Impact and Solutions for Accurate Analysis Key takeaways Multicollinearity occurs when two or more independent variables in a regression are highly correlated, making it hard to isolate each variable’s effect. The Variance Inflation Factor (VIF) is a common diagnostic: VIF ≈ 1 (no correlation), 1–5 (moderate), >5 (high multicollinearity). Solutions include removing or…

Multi-Factor Model Overview A multi-factor model explains asset returns by attributing them to multiple risk factors instead of a single market factor. These models are used to analyze individual securities and portfolios, to build portfolios with targeted characteristics, and to understand the drivers of returns and risk. Explore More Resources › Read more Government Exam…

Multi-Asset Class: Definition, Fund Types, Benefits A multi-asset class investment combines more than one asset class—such as equities, bonds, cash, and real estate—into a single portfolio or fund. By allocating capital across different types of assets, these investments aim to reduce volatility and manage risk compared with holding a single asset class. How multi-asset investments…