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Marketing: Key Strategies and Concepts Marketing is the set of activities a company uses to create awareness, attract customers, and facilitate the buying and selling of goods or services. It connects a product or service with its intended audience through messaging, distribution, pricing, and promotion—aiming to drive sales, build relationships, and shape brand perception. Key…

Marketable Securities Marketable securities are liquid financial instruments that can be quickly converted into cash at a reasonable price, typically within one year. Companies use them to earn a return on idle cash while preserving ready access to funds for short-term needs. How they work Businesses invest excess cash in short-term, highly tradable instruments instead…

Market Value of Equity Market value of equity, also known as market capitalization, is the total dollar value investors place on a company’s equity. It is calculated by multiplying the current share price by the total number of outstanding shares. How to calculate Find the current share price. Find the total number of outstanding shares…

Market Value Added (MVA) What MVA measures Market Value Added (MVA) shows the difference between a company’s market value and the total capital contributed by its investors (both shareholders and bondholders). It indicates the value management has created (or destroyed) for investors since capital was provided. Formula MVA = V − K Explore More Resources…

Market Value Definition Market value is the price an asset would sell for in the open market, based on the prices buyers are willing to pay and sellers are willing to accept. For publicly traded companies, market value typically refers to market capitalization: the current share price multiplied by the number of outstanding shares. Why…

Mark to Market (MTM) What is Mark to Market? Mark to market (MTM), or fair value accounting, values assets and liabilities at their current market price rather than their historical cost. It provides a snapshot of what an asset would fetch in an orderly market transaction today, offering transparency into an entity’s real-time financial position….

Market Timing Key takeaways * Market timing means moving money into or out of markets—or between asset classes—based on predictions about future price moves. * It contrasts with buy-and-hold investing and is central to many active trading strategies. * Market timing can produce larger short-term gains but is difficult to execute consistently and often underperforms…

Market Share — What It Is and Why It Matters Market share is the percentage of total sales in an industry that a single company captures over a defined period. It indicates a company’s relative size and competitiveness within its market. How to Calculate Market Share Formula: Market share = (Company sales in period) /…

Market sentiment describes the overall mood or attitude of investors toward stocks, sectors, or the market as a whole. Driven by crowd psychology, it shows up in buying and selling behavior: bullish sentiment accompanies rising prices, while bearish sentiment accompanies falling prices. Sentiment often reflects emotions and short-term expectations rather than underlying fundamentals, making it…

Market Segmentation Theory Market segmentation theory (also called the segmented markets theory) argues that interest rates at different maturities are determined independently because different groups of investors prefer specific bond maturity ranges. Short-, intermediate-, and long-term debt are viewed as separate markets with their own supply and demand dynamics. Key points Long- and short-term interest…

Market Segmentation Market segmentation is the process of dividing a broad target market into smaller, distinct groups of consumers who share common characteristics. By tailoring products, messaging, pricing, and distribution to those groups, companies can increase relevance, engagement, and conversion rates while differentiating themselves from competitors. Key takeaways Segments are commonly demographic, geographic, behavioral, psychographic,…

What is a market segment? A market segment is a subgroup of consumers who share one or more characteristics that make their needs, preferences, or behaviors similar enough for a business to target them with tailored products, services, or marketing. How market segments work Market segmentation divides a larger market into smaller, more homogeneous groups….

What is market saturation? Market saturation occurs when demand for a product or service in a market has been maximized — either because most potential buyers already own the product, alternatives satisfy needs, or growth opportunities are exhausted. In a saturated market, further sales growth must come from convincing customers to switch from competitors or…

Market Risk Premium — What it Is and How to Use It What is the market risk premium (MRP)? The market risk premium is the extra return investors expect for holding a market portfolio instead of a risk-free asset. It is calculated as the difference between the expected return on the market and the risk-free…

Market Risk: Definition and How to Manage Systematic Risk What is market risk? Market risk (also called systematic risk) is the potential for financial loss resulting from broad market movements—price changes, interest-rate shifts, exchange-rate swings, or other events that affect the entire market. Unlike company-specific risks, market risk cannot be eliminated through diversification, though it…

Market Research Market research is the systematic process of gathering, analyzing, and interpreting information about a market, consumers, and competitors to inform product strategy, marketing, and business decisions. It helps businesses validate ideas, identify customer needs, segment audiences, and reduce the risk of costly product failures. Key takeaways Market research guides product design, pricing, distribution,…

Market Price Definition Market price is the current price at which a good, service, or financial instrument can be bought or sold. It reflects the point where the quantity supplied and the quantity demanded meet at a given moment. How market price is determined Market price is set by the interaction of supply and demand:…

Market Power: Definition and Key Takeaways Market power (also called pricing power) is a firm’s ability to influence the price of a product or service by affecting supply, demand, or both. Firms with significant market power can protect profit margins, shape market conditions, and raise barriers to entry for competitors. Key takeaways: * Market power…

Market Portfolio: Definition, Theory, and Examples What is a market portfolio? A market portfolio is a theoretical, fully diversified bundle that contains every investable asset, with each asset weighted in proportion to its market value. Its expected return equals the expected return of the market as a whole. Because it holds every asset, a market…

Market Penetration: Definition, Calculation, Strategies, and Trade-Offs What is market penetration? Market penetration measures the proportion of a target market that is using a product or service. Expressed as a percentage, it shows how well a product sells relative to the total potential customers for that product. The metric helps companies evaluate growth opportunities, benchmark…

Market Orientation: Consumer-Centric Strategies Explained What is market orientation? Market orientation is a business strategy that centers on understanding and meeting consumers’ needs and preferences. Instead of designing products first and then finding customers for them, market-oriented companies use customer insights to guide product development, positioning, and long-term strategy. How it works Conduct market research…

Market Order A market order is an instruction to buy or sell a security immediately at the best available price in the current market. It is the default order type on most broker platforms and is designed for quick execution rather than price control. How market orders work When you submit a market order, you…

Market-on-Close (MOC) Order A market-on-close (MOC) order is a market order set to execute as close as possible to the official market close. Traders use MOC orders to capture the closing price or to ensure a trade occurs at the end of the trading day without having to submit a market order exactly at the…

Market Neutral: Definition, Strategies, Benefits, and Risks What is market neutral? A market-neutral strategy seeks to generate returns regardless of overall market direction by minimizing exposure to systematic (market-wide) risk. Managers typically achieve this by taking offsetting long and short positions so portfolio performance depends mainly on security selection rather than broad market moves. Key…

Market Manipulation: Methods, Examples, and How to Protect Yourself Market manipulation refers to deliberate actions intended to deceive investors or artificially influence the price of securities or currencies. These practices are generally illegal in securities markets but can be hard to detect and prove. In international trade, accusations of currency manipulation are often political and…

Market Maker What is a market maker? A market maker is a firm or individual that continuously posts buy (bid) and sell (ask) prices for a particular security, along with the size (volume) they are willing to trade. By standing ready to buy and sell, market makers provide liquidity and depth to financial markets and…

What Is a Market Leader? Definition, Traits, and Examples A market leader is a company that holds the largest market share within its industry and can shape the competitive landscape. Beyond sheer sales volume, leadership can show up in brand recognition, distribution reach, pricing power, product perception, and profit margins. Market leaders often set industry…

Market Indicators: Definition, How They’re Used, and Examples Key takeaways * Market indicators are quantitative metrics that analyze data across multiple securities to help forecast broad market moves. * They are a subset of technical indicators and typically involve formulas or ratios applied to numerous stocks or contracts rather than a single security. * Common…

Market Index: Definition and Overview A market index is a curated list of securities—stocks, bonds, or other assets—selected to represent a specific segment of a financial market. The index value is calculated from the prices or market characteristics of its constituents and serves as a benchmark for tracking market performance or building investment products. Key…

Market Failure A market failure occurs when the free market’s forces of supply and demand do not produce an efficient allocation of resources. Instead of reaching an equilibrium that maximizes overall welfare, outcomes leave some people worse off or resources misallocated. Market failure can appear in explicit markets (goods and services) or in implicit exchanges…

Market Exposure Market exposure is the portion of an investor’s portfolio invested in a particular security, asset class, industry, or geographic market. It indicates how much of the portfolio’s value is subject to the risks and returns associated with that area. Monitoring and managing exposure helps control concentrated risk and align a portfolio with investment…

Market Efficiency Market efficiency describes how well market prices reflect the true value of underlying assets by incorporating available information. In an efficient market, prices already embed all relevant information, leaving little or no opportunity to consistently outperform the market through trading on public data. Key takeaways Market efficiency measures how quickly and accurately prices…

Market Economy A market economy is an economic system where production, distribution, and prices are determined mainly by supply and demand through voluntary transactions between buyers and sellers, rather than by central government planning. Key takeaways Prices and output are set by supply and demand, not a central planner. Entrepreneurs combine land, labor, and capital…

Understanding Market Dynamics Market dynamics are the forces that drive changes in prices, production, and consumption within an economy. They arise from interactions between supply and demand and are shaped by factors such as price responsiveness, competition, seasonality, technology, regulation, and strategic business decisions. Key takeaways * Market dynamics result from shifts in supply and…

Market Depth: Definition, How It’s Measured, and Why It Matters Key takeaways * Market depth measures a market’s ability to absorb large buy or sell orders without moving the price significantly. * It’s derived from the number and size of open bids and offers across price levels in the order book. * High trading volume…