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Financial terms: M-O

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A calculation, required under National Instrument 81-102 (a regulation adopted in all Canadian provinces and territories), that includes management fees and fund expenses. It lets investors compare management fees and expenses between mutual funds and other managed money products.
Fees charged by all investment dealers, such as mutual fund companies, to pay fund managers or to pay for investment advisory services. Management fees are deducted directly from the fund.
A sum of money an investor must leave on deposit to use borrowed funds to trade securities. It is generally based on a percentage value of those securities, and the money is normally provided by a stockbroker.
An investment account that permits the use of borrowed money for securities trading. Money is borrowed against the securities held in the account.
The rate of tax that will be applied to a taxpayer’s next dollar of income earned.
A venue, physical or electronic, in which goods, products or services are bought and sold.
A hypothesis that market prices accurately reflect all available information and all investments are priced at a fair value.
Ratios used to measure the value of a company’s shares and compare it with that of other companies.
Fluctuations in securities markets that affect even the most diversified mutual funds. A slumping market will affect any stock-based fund.
Shifting a portion of a portfolio’s asset mix from investments in one sector or asset class to another based on expectations of economic trends or sector news.
The date at which the par value of a bond is to be paid to the bondholder.
A corporation that is formed when a physician incorporates their practice. It enables shareholders to own shares in the medical professional corporation. Shareholders may include the physician and their family members. See also “shareholder.”
An illegal process, punishable under the Canadian Criminal Code, to disguise money or assets that come from criminal activity.
A low-risk, liquid mutual fund that invests in treasury bills, commercial debt and other cash-based investments.
A real estate loan secured by a property that requires the purchaser (the mortgagor) to repay the debt, plus interest, over a predetermined period to the mortgagee. See also “closed mortgage” and “open mortgage.”
A portfolio of residential and commercial mortgages, sometimes limited to properties insured by Canada’s National Housing Act. In many cases, these funds are issued by the banks that initiate the mortgage loans and will buy back any loans that have defaulted, reducing the risk of the fund.
A professionally managed investment portfolio broken into an unlimited number of units that are bought and sold directly by the fund. The unit price is determined by the value of the securities it holds — not by market price.


The net asset of a fund, divided by the number of units issued. Also called net asset value per share (NAVPS).
A ratio showing a company’s profitability by factoring in expenses and taxes to determine how efficiently the company is managed.
The total value of a person’s or company’s assets, minus all liabilities.
When an account balance is not sufficient to cover the amount of a cheque.
The interest rate quoted on an investment or loan, typically used for comparison purposes, that does not factor in inflationary effects. Typically used for comparison purposes.
A rate of return on an investment, not adjusted for taxes and inflation. For a bond, this would equal the coupon rate.
Non-fungible tokens (NFTs) are unique data units stored on a blockchain network. NFTs have unique embedded identification information and metadata. NFTs have taken the form of digital videos, images, audio and more that can be bought, sold or traded. See also "blockchain".
An investment that cannot be withdrawn before maturity.


A government benefit, payable to qualifying Canadian citizens and legal residents over age 65.
A real estate loan that a borrower may repay in full without penalty at any time prior to the conclusion of its term. See also “mortgage” and “closed mortgage.”
Expenses incurred from day-to-day business activities. For mutual funds, these include administrative expenses, audit fees, brokerage fees and securities filings.
Ratios, including profitability and efficiency measures, that indicate how well a company is using its resources and controlling costs.
A derivative security giving its holder the right, but not the obligation, to buy or sell an underlying asset at a set price within a fixed period of time.
The payment received by an investor for selling an option contract (that is, the payment received by the writer of the option contract).
Contribution to a registered retirement savings plan (RRSP) or tax-free savings account (TFSA) in excess of an individual’s allowed limit. The allowed limit is a combination of that individual’s annual maximum plus any carry-forward room, less any contributions already made. Taxpayers are permitted an over-contribution of up to $2,000 to their RRSP without penalty; however, additional over-contributions incur a tax penalty.
The interest rate at which major Canadian financial institutions lend money to each other on an overnight basis (if they have a shortage or surplus of cash at the end of the day).

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