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Indian Market, Regulation & Taxation

MCX

The Multi Commodity Exchange of India, the country's largest exchange for commodity derivatives.

Test: the contract is a commodity derivative admitted to trading on the MCX, regulated by SEBI qualitative
Risk & Portfolio Management

Mean Reversion

The tendency of a series to return toward its long-run average after moving far away from it.

Test: extreme deviations from a long-run mean are followed on average by moves back toward that mean qualitative
Market Psychology & Behavioural Finance

Mental Accounting

Treating money differently depending on its source or intended use, rather than as fungible.

Test: identical amounts are treated differently according to which mental category they occupy qualitative
Corporate Actions, Dividends & Governance

Merger

The combination of two companies into a single entity, with one absorbing the other or both forming a new company.

Test: the transferor company's assets, liabilities and shareholders move into the transferee company under an approved scheme qualitative
Market Basics & Instruments

Mid-Cap Stock

A share of a company ranked 101st to 250th by market capitalisation under India's classification.

Rank all listed companies by average market capitalisation; ranks 101 to 250 are mid-cap qualitative
Corporate Actions, Dividends & Governance

Minimum Public Shareholding

The regulatory requirement that at least a stated proportion of a listed company's shares be held by the public.

Test: public shareholding is at least 25% of total shares, with a longer timeline permitted for certain state-owned companies %
Fundamental Analysis & Valuation

Moat

A durable structural advantage that lets a company earn returns above its cost of capital for many years without being competed away.

Test: returns on capital stay above the cost of capital across a full cycle, and the reason can be named as a specific barrier qualitative
Risk & Portfolio Management

Modern Portfolio Theory

The framework holding that assets should be judged by their contribution to a portfolio's risk and return, not in isolation.

Portfolio Return = Sum of Weighted Returns; Portfolio Variance = Sum over all pairs of (Weight i x Weight j x Covariance of i and j) qualitative
Bonds & Fixed Income

Modified Duration

The percentage change in a bond's price for a one-percentage-point change in yield.

Modified Duration = Macaulay Duration / (1 + Yield to Maturity / Number of Coupons per Year) years
Indicators & Oscillators

Momentum Indicator

An indicator measuring the speed of price change rather than its level or direction.

Momentum = Current Close - Close n periods ago
Economy, Macro & Market Cycles

Monetary Policy

A central bank's management of interest rates and money supply to achieve inflation and growth objectives.

Test: the central bank adjusts policy rates, reserve requirements or liquidity operations to influence credit conditions qualitative
Indicators & Oscillators

Money Flow Index

An oscillator bounded 0 to 100 that applies the RSI calculation to price multiplied by volume rather than to price alone.

MFI = 100 - 100 / (1 + Money Flow Ratio), where the ratio is Positive Money Flow / Negative Money Flow over n periods and Money Flow = Typical Price x Volume ratio (x, times)
Economy, Macro & Market Cycles

Money Supply

The total stock of money in an economy, measured in graduated aggregates from narrow to broad.

M3 = Currency with the Public + Demand Deposits + Time Deposits + Other Deposits with the Reserve Bank ₹ crore
Derivatives, Futures & Options

Moneyness

The relationship between an option's strike price and the current price of the underlying.

Moneyness = Spot / Strike for a call, or Strike / Spot for a put; values above 1 indicate in the money ratio (x, times)
Technical Analysis & Chart Patterns

Morning Star

A three-candle formation of a large falling candle, a small-bodied candle, then a large rising candle closing well into the first body.

Test: candle 1 falls strongly; candle 2 has a small body below it; candle 3 rises and closes above the midpoint of candle 1's body qualitative
Indicators & Oscillators

Moving Average

The average price over a fixed number of recent periods, recalculated as each new period is added.

Moving Average = Sum of the last n Closing Prices / n
Indicators & Oscillators

Moving Average Crossover

The point at which a shorter moving average crosses above or below a longer one.

Test: Short-Period Moving Average crosses through Long-Period Moving Average, in either direction qualitative
Indian Market, Regulation & Taxation

Muhurat Trading

A symbolic one-hour trading session held on Diwali to mark the start of the Hindu accounting year, Samvat.

Test: a special trading session is conducted by the exchanges on Diwali at a time announced in advance qualitative
Funds, ETFs & Index Investing

Multi-Cap Fund

An equity fund required to hold a minimum allocation to each of the large, mid and small-cap segments.

Test: at least 25% each in large-cap, mid-cap and small-cap, totalling a minimum of 75% in equity %
Market Basics & Instruments

Multibagger

A colloquial label for a share whose price has risen to a multiple of its purchase price, such as a five-bagger for a fivefold rise.

Bagger Multiple = Current Price / Purchase Price ratio (x, times)
Funds, ETFs & Index Investing

Mutual Fund

A pooled investment vehicle that collects money from many investors and invests it in securities according to a stated objective.

Investor's Value = Units Held x Net Asset Value per Unit
Market Psychology & Behavioural Finance

Myopic Loss Aversion

The tendency to evaluate a long-term portfolio too frequently, magnifying the felt pain of short-term losses.

Test: the probability of observing a loss rises sharply as the evaluation interval shortens, while the underlying investment is unchanged qualitative