The MER is the percentage of the
value of the assets of an investment company
(eg mutual fund, closed-end
fund, unit investment trusts), that is deducted by the fund
manager to cover the costs of managing the fund. This is not
part of the front end or back end fees paid to purchase the mutual
fund, and is not a cost that is seen by the investor.
However, it reduces the return to the investor. The
MER is usually in the range of 1.5% to 3% per year.
A much lower MER is charged
by Exchange Traded Funds, or ETFs. At www.iunits.com,
there is a tool called the MER Impact Calculator, which demonstrates
what a huge difference the MER rate makes over a period of 20 years.
If you have securities at a brokerage in a margin
account, the brokerage will allow you to borrow a percentage of the
value of your holdings. A higher percentage is allowed for large
cap stocks, and you cannot borrow anything against some small cap
If you have bought stocks on margin, and the amount you
have borrowed exceeds the margin limit that the brokerage has allowed
you, you will receive a call from the broker asking you to either sell
some stocks or transfer money into your account.
A person's marginal tax rate is the
tax rate that will be applied to the next dollar
When an investment is marked
to market, it is shown on the balance sheet at market value.
This results in changes in the market value being shown on the income
statement as a profit or loss.
The bringing together of people for
the purpose of trade. This can be done
electronically in the form of a stock market, or
physically in the form of a farmer's market.
Market capitalization, or the
total market value of the company, is calculated by multiplying the
current price per share by the total number of common shares currently
A "market maker" is
a firm that will buy and sell a particular stock on a regular and
continuous basis at a publicly quoted price. A stock exchange
will appoint brokerages to act as market makers on certain
stocks. A trader from the brokerage will buy and sell shares on
the open market, maintaining a minimum level of trading
activity, and trying to reduce the price volatility in their assigned
stocks. On some exchanges, the market makers can buy shares from
An order placed to buy or sell
a security immediately at the best current price possible.
Most recent quarter.
Some ratios reported on investment information websites may be calculated from the company's financial statements
for the most recent quarter (3 month period).
Also known as an open-end
fund, this is an investment company which pools the
money of many investors, and uses the money to invest in a variety of
different securities. The securities may be stocks, bonds, money
market securities, or a combination of these. The mutual fund
has a fund manager to handle the buying and selling of
securities. The fund company does the recordkeeping for
individual investors, providing reports which detail cost basis,
dividend income, capital gains, etc. For these services, the
mutual fund company charges a management fee, which is usually
expressed as a percentage of the asset value of the fund. This
is called the management expense ratio (MER).
This fee is taken from the fund by the fund manager to cover the costs
of managing the fund. Many mutual funds also
charge fees when the funds are purchased (front end fees or loads) or
sold (back end fees or loads). The ones which do not charge
these fees are called no-load funds.
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site to your best advantage.
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