What Are Material Participation Tests? Material participation tests are a set of Internal Revenue Services (IRS) criteria that evaluate whether a taxpayer has materially participated in a trade, business, rental, or other income-producing activity. A taxpayer materially participates if they pass one of the seven material participation tests. However, passive activity rules limit the deductibility
What Is Material Weakness? A material weakness is when one or more of a company’s internal controls—activities, rules, and processes designed to prevent significant financial statement irregularities and improve operation efficiency—is ineffective. If a deficiency in internal control is a material weakness, it could result in a material misstatement in a company’s financial statements. This
What is Mathematical Economics? Mathematical economics is a method of economics that utilizes math principles and tools to create economic theories and to investigate economic quandaries. Mathematics permits economists to construct precisely defined models from which exact conclusions can be derived with mathematical logic, which can then be tested using statistical data and used to
What Is a Maturity Date? The maturity date is the date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due. On this date, which is generally printed on the certificate of the instrument in question, the principal investment is repaid to the investor, while the interest payments
What Is a Maturity Gap? A maturity gap is the difference between the total market values of interest rate sensitive assets versus interest rate sensitive liabilities that will mature or be repriced over a given range of future dates. It provides a measure of the interest rate based repricing risk that a bank faces for
What Is Maturity Guarantee? Maturity guarantee is the dollar amount of a life insurance policy or segregated fund contract that is guaranteed within a specified period. However, there are typically additional fees for the protection guarantee and rules for how long the policy or investment product needs to be held to qualify. Key Takeaways Maturity
What Is a Maturity Mismatch? Maturity mismatch is a term used to describe situations when there’s a disconnect between a company’s short-term assets and its short-term liabilities—specifically more of the latter than the former. Maturity mismatches can also occur when a hedging instrument and the underlying asset’s maturities are misaligned. A maturity mismatch may also
Maurice Allais was a prominent French economist. Known as a pioneer in his research on market equilibrium and efficiency, Allais was awarded the 1988 Nobel Prize in economics. His study of human risk behavior led to his widely regarded “Allais paradox.” Maurice Allais died on Oct. 9, 2010. Key Takeaways Maurice Allais was a French
What Is Maximizer Maximizer is a brand of customer relationship management (CRM) software popularly used by brokers and investment advisors for tracking clients and leads. The software provides contact management solutions for entrepreneurs, small and medium businesses, and large corporations. The Canadian company was founded in 1987 and is headquartered in Vancouver, British Columbia. BREAKING DOWN Maximizer Brokers and investment dealers often use
What Is a Maximum Loan-To-Value Ratio? A maximum loan-to-value ratio is the largest allowable ratio of a loan’s size to the dollar value of the property. The higher the loan-to-value ratio, the bigger the portion of the purchase price of a home is financed. Since the home is collateral for the loan, the loan-to-value ratio
