What Is Marginal Utility? Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item consumers are willing to purchase. Positive marginal utility occurs when the consumption of an additional
What Is Marginal VaR? Marginal VaR refers to the additional amount of risk that a new investment position adds to a firm or portfolio. Marginal VaR allows risk managers to study the effects of adding or subtracting positions from an investment portfolio. Since value at risk (VaR) is affected by the correlation of investment positions
What Is a Margin Call? A margin call occurs when the percentage of an investor’s equity in a margin account falls below the broker’s required amount. An investor’s margin account contains securities bought with a combination of the investor’s own money and money borrowed from the investor’s broker. A margin call refers specifically to a broker’s
What Is Margin Creep? Margin creep has multiple meanings in finance. In both of the cases, margin creep refers to a slow reduction over time of a company’s overall profit margin. A product’s margin is the difference between the cost of the good or service and the retail price. The greater the difference between the cost of
What Is Margin of Safety? Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. In other words, when the market price of a security is significantly below your estimation of its intrinsic value, the difference is the margin of safety. Because
What Is Marital Property? Marital property is a U.S. state-level legal term that refers to property acquired during the course of a marriage. Property that an individual owns before a marriage is considered separate property, as are inheritances or third-party gifts given to an individual during a marriage. Marriage partners may choose to exclude certain
What Is a Marital Trust? A marital trust is a fiduciary relationship between a trustor and trustee for the benefit of a surviving spouse and the married couple’s heirs. Also called an “A” trust, a marital trust goes into effect when the first spouse dies. Assets are moved into the trust upon death and the
What Is Maritime Law? Maritime law, also known as admiralty law, is a body of laws, conventions, and treaties that govern private maritime business and other nautical matters, such as shipping or offenses occurring on open water. International rules governing the use of the oceans and seas are known as the Law of the Sea.
What Is a Market Basket? A market basket is a selected group of products or assets designed to track the general performance of a specific market segment. This is sometimes known as a basket of goods. Market basket economics focuses on the Consumer Price Index (CPI), which tracks various consumer goods and uses their price
What Is a Mandatory Convertible? A mandatory convertible is a type of convertible bond that has a required conversion or redemption feature, rather than the convertible feature being an option. For these bonds, either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. Key Takeaways
