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Modified Duration What it is Modified duration measures a bond’s price sensitivity to changes in interest rates. It estimates the approximate percentage change in a bond’s price for a 100-basis-point (1 percentage point) change in yield, assuming small changes and a parallel shift in the yield curve. It is derived from Macaulay duration and is…

Modified Dietz Method What it is The Modified Dietz method is a dollar-weighted way to measure a portfolio’s historical rate of return over a specified period while accounting for the timing of external cash flows (contributions, withdrawals, fees). It assumes a single, constant rate of return for the period and uses weighted cash flows so…

Modified Endowment Contract (MEC) A modified endowment contract (MEC) is a permanent life insurance policy that has been overfunded relative to IRS limits, causing it to lose certain favorable tax treatments. The Internal Revenue Service determines MEC status primarily through the “seven‑pay test.” Once a policy is classified as an MEC, withdrawals and loans are…

Modified Cash-Basis Accounting Modified cash-basis accounting blends elements of cash and accrual accounting. It keeps the simplicity of cash accounting for day-to-day transactions while adopting accrual treatments for longer-term assets and liabilities. The result is a practical, cost-effective method that can give private businesses a clearer financial picture without adopting full accrual accounting. How it…

What is Modified Adjusted Gross Income (MAGI)? Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) after certain deductions, exclusions, or tax-preferred amounts are added back. MAGI is used by the IRS and other agencies to determine eligibility for a variety of tax benefits, retirement account rules, and government programs. Because it’s AGI…

Modified Accrual Accounting Modified accrual accounting is a hybrid bookkeeping method that blends elements of cash-basis and accrual-basis accounting. It recognizes revenues when they are both measurable and available to finance current-period expenditures, while generally recording expenditures when liabilities are incurred. This approach is widely used by government entities because it emphasizes current-year resource availability…

Modified Accelerated Cost Recovery System (MACRS) Overview The Modified Accelerated Cost Recovery System (MACRS) is the U.S. federal tax system for depreciating tangible property. It lets businesses recover the cost of qualifying assets over fixed recovery periods through annual depreciation deductions. MACRS is generally required for property placed in service after 1986 and is designed…

Modern Portfolio Theory (MPT) Modern Portfolio Theory (MPT) is a mathematical framework for constructing investment portfolios that maximize expected return for a given level of risk, or equivalently minimize risk for a desired return. Introduced by Harry Markowitz in his 1952 paper “Portfolio Selection,” MPT formalized the benefits of diversification and remains a foundational concept…

Model Risk: Definition, Management, and Examples What is model risk? Model risk arises when a quantitative model produces inaccurate or misleading outputs that lead to adverse decisions or financial losses. Models—systems that apply economic, statistical, mathematical, or financial techniques to data—simplify reality and depend on assumptions, inputs, and implementation. When those elements are flawed, the…

Mode: What It Is in Statistics and How to Calculate It Definition The mode is the value that appears most frequently in a data set. A data set can be unimodal (one mode), bimodal (two modes), multimodal (more than two), or have no mode if no value repeats. When the Mode Is Useful Best for…

Mobile Wallet: What It Is, How It Works, and Why It Matters Key takeaways * A mobile wallet is an app or built-in feature that stores payment cards and other credentials on a smartphone, tablet, or wearable. * Payments in stores typically use near-field communication (NFC); online purchases use stored card data or tokens. *…

Understanding Mobile Commerce: Benefits, Examples, and Trends What is mobile commerce (m-commerce)? Mobile commerce, or m-commerce, refers to buying, selling, banking, and other online transactions performed on handheld devices such as smartphones and tablets. Common m-commerce activities include shopping, digital payments, banking, bill pay, ticket purchases, and streaming purchases (music, video, e-books). Explore More Resources…

Mobile Banking Mobile banking is performing financial transactions using a mobile device such as a smartphone or tablet. Transactions can range from simple alerts about account activity to depositing checks, paying bills, transferring money, and locating ATMs. Mobile banking lets people manage money anywhere, anytime, but it also introduces security risks and can offer fewer…

Mixed Economic System A mixed economic system combines elements of capitalism and socialism: private property and market mechanisms operate alongside government intervention aimed at social objectives. Most modern economies fall on a continuum between pure free markets and centrally planned systems, with governments intervening selectively to correct market failures, provide public goods, and promote redistribution….

Mission Statement A mission statement is a brief declaration of an organization’s purpose: what it does, who it serves, and why it matters. Typically one sentence or a short paragraph, it communicates core values, culture, and long‑term intent in a concise, memorable way. Key purposes Clarify the organization’s reason for existing. Guide decision‑making and set…

Misrepresentation: Definition, Types, and Remedies Key takeaways * Misrepresentation is a false statement of material fact that induces another party to enter a contract. * It applies to statements of fact, not opinions or predictions. * Three main types—innocent, negligent, and fraudulent—carry different remedies, including rescission and damages. * Misrepresentation can arise in many contexts…

Misery Index: Definition, Components, History, and Limitations What the Misery Index Is The Misery Index is a simple indicator of economic distress experienced by the average person. It is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate. A higher value indicates greater economic pain from joblessness and rising prices. Explore…

Minsky Moment — Definition and Overview A Minsky moment is the sudden collapse of asset prices and credit after a prolonged period of speculative growth driven by rising leverage. Coined in the late 20th century to describe recurring financial crises, the term captures how stability can breed excessive risk-taking that eventually unwinds abruptly. Key takeaways…

Minority Interest What it is A minority interest (also called a non-controlling interest) is an ownership stake in a subsidiary company that is less than the controlling share. The parent company retains control—usually by holding more than 50% of voting rights—while minority owners hold a smaller portion and typically have limited influence over major decisions….

Minimum Wage Key takeaways Minimum wage is the legally mandated lowest hourly pay for nonexempt workers. Federal minimum wage (U.S.) is $7.25 per hour as of 2025. States and localities can set higher minimums; employers must pay the highest applicable rate. As of January 2025, 30 states and the District of Columbia have minimums above…

Minimum Monthly Payment: What It Means for Credit Cards What is the minimum monthly payment? The minimum monthly payment is the smallest amount a cardholder must pay each month on a revolving credit account to remain in good standing and avoid late fees. It’s typically calculated as a small percentage of the outstanding balance (often…

Minimum Lease Payment — Definition and Calculation Minimum lease payments are the lowest total payments a lessee is contractually required to make over the life of a lease. Accountants discount these payments to present value to determine the lease’s value for financial reporting and to help decide lease classification. What’s included and excluded Included: Scheduled…

Minimum Efficient Scale (MES) The minimum efficient scale (MES) is the smallest production level at which a firm’s long-run average total cost (LRATC) is minimized. At MES a firm has realized the available economies of scale and can produce at the lowest possible cost per unit; beyond that point, increases in output yield constant returns…

Milton Friedman Overview Milton Friedman (1912–2006) was a leading 20th-century economist known for championing free-market capitalism and developing monetarism. He reshaped macroeconomic thought by arguing that controlling the money supply, rather than active fiscal intervention, was the principal tool for managing inflation and stabilizing the economy. His work influenced policy debates worldwide and left a…

Millennials: Finances, Investing, and Retirement Key takeaways “Millennials” generally refers to people born 1981–1996 (also called Generation Y). This generation faces unique financial headwinds: wage stagnation, high student debt, and a widening wealth gap. Many millennials prioritize work-life balance, entrepreneurship, and partial or flexible retirement over a traditional full stop to working life. Millennials are…

Millage Rate The mill rate (or millage rate) is the tax rate used to calculate property taxes. One mill equals 1/1,000 of a currency unit—equivalently, $1 of tax for every $1,000 of assessed (taxable) property value. Key points Mill rate = tax dollars per $1,000 of assessed value. Property tax = (Mill rate × Taxable…

Mill Rate: How Property Taxes Are Calculated Key takeaways * A mill (or millage) equals 1/1,000 of currency value: 1 mill = $1 of tax per $1,000 of assessed property value. * Property tax = (Mill rate × Taxable assessed value) ÷ 1,000. * Multiple taxing authorities (city, county, school district, special districts) each set…

Mill Levy: What it Is and How It Works A mill levy is a property tax rate expressed in mills. One mill equals one dollar of tax per $1,000 of assessed property value (0.001 in decimal form). Local taxing jurisdictions—such as school districts, counties, and cities—set mill levies to raise revenue for public services like…

MiFID II Explained: Key Regulations and Impact in the EU Key takeaways MiFID II is an EU regulatory framework in force since 2018 designed to increase transparency, strengthen investor protection, and standardize market practices across the bloc. It broadens oversight to most asset classes and trading venues, including OTC trades and dark pools. Major reforms…

Midstream Oil Operations What is midstream? Midstream refers to the segment of the oil and gas industry that handles processing, storage, transportation, and marketing of petroleum, natural gas, and natural gas liquids (NGLs). It links upstream activities (exploration and production) with downstream activities (refining and retail), providing the infrastructure and services that make physical movement…

What is a middleman? A middleman (intermediary) is an entity that facilitates transactions between buyers and sellers. They connect parties, handle logistics or paperwork, provide market access or advice, and are typically compensated via a commission, fee, or markup on resale. Key takeaways Middlemen include agents, brokers, wholesalers, distributors and dealers. They earn revenue through…

Middle Office: Role and Importance in Financial Services Firms Key takeaways * The middle office bridges the front office (revenue-generating activities) and the back office (administration and settlement). * It focuses on risk management, profit-and-loss (P&L) calculation, compliance, and IT systems that support trading and transaction processing. * Middle office roles typically require a bachelor’s…

Understanding Middle Market Firms Middle market firms are businesses that sit between small enterprises and large corporations. They play a crucial role in the U.S. economy and present distinct operational, financing, and investment characteristics. What is a middle market firm? Typical revenue range: roughly $10 million to $1 billion annually (definitions vary; some sources set…

Middle-Income Countries (MICs) What is a middle-income country? A middle-income country (MIC) is an economy whose gross national income (GNI) per capita falls between $1,136 and $13,845 (thresholds used by the World Bank for 2024). The World Bank divides MICs into two subgroups: * Lower-middle-income: GNI per capita $1,136–$4,465 * Upper-middle-income: GNI per capita $4,466–$13,845…

Middle East and North Africa (MENA): Overview, Key Economies, and Energy Insights Key takeaways * MENA commonly refers to countries spanning northwest Africa to southwest Asia and typically includes about 20–25 nations. * The region holds more than half of the world’s proven oil reserves and a large share of natural gas reserves, making it…