BNP Paribas Asset Management - BNPP AM - Corporate

Financial glossary

M

Margin call

A margin call is the daily amount received (paid) by (to) the counterparty of a derivative transaction that has a positive (negative) daily valuation. This process enables a reduction of counterparty risk as it cancels, on a daily basis, the credit exposure to the derivative counterparty.

Marked-to–market

Marked-to-market is a valuation mode used to record the price of a security for its market value (price at which the security can actually be sold in the market). Other accounting methodologies (fair value, historical cost) can also be used to value a security.

Marked-to–market

Marked-to-market is a valuation mode used to record the price of a security for its market value (price at which the security can actually be sold in the market). Other accounting methodologies (fair value, historical cost) can also be used to value a security.

Maturity

The length of time until the principal amount of a bond must be repaid

Maximum drawdown

The maximum drawdown is the maximum loss a portfolio has incurred between two dates.

Money market

Market where the buying, selling, lending and borrowing of short-term funds (less than one year) occur.

Murabaha

In Islamic finance, a murabaha is a contract which refers to the sale of an asset at a price which includes a profit level initially agreed by both parties of the contract. Therefore, this contract is valid if price, associated costs and profit margins are initially defined and stated (at the time of the sale agreement).

Mutual Fund

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets