Warrant
Margin Debt
What is Margin Debt? Margin debt represents the amount that an investor owes a broker in their margin account. When a broker approves a margin account for an investor, the margin account is granted a line of credit that can be used to purchase securities. The brokerage charges an interest rate on the margin debt,…
Margin Loan Availability
What is Margin Loan Availability? Margin loan availability refers to the funds currently available in a margin account that can be used to purchase additional securities. An investor can also withdraw the funds for personal use. A margin account allows investors to purchase more securities than they would’ve purchased using their actual deposits. When investors…
Margin of Safety
What is the Margin of Safety? The margin of safety is an investment principle where the investor buys stocks when the market price is below their actual value. It is evaluated as the change between the price of a financial instrument and its basic value. The margin of safety acts as a built-in cushion that allows…
Marginal Analysis
What is Marginal Analysis? Marginal analysis compares the additional benefits derived from an activity and the extra cost incurred by the same activity. It serves as a decision-making tool in projecting the maximum potential profits for the company by comparing the costs and benefits of the activity. The term “marginal” is used by economists to…
Marginal Benefit
What is Marginal Benefit? Marginal benefit is the highest amount that a buyer is willing to pay for an extra unit of product. It is also known as marginal utility, and it accompanies any extra unit purchased after the first unit. A marginal benefit may also be used to refer to the satisfaction that a…
Marginal Cost of Production
What is the Marginal Cost of Production? The marginal cost of production may be defined as the costs incurred for each extra output produced. For example, when a factory is operating at maximum capacity, processing additional products will require overtime pay for the workers. Generally, the marginal cost of production tends to rise as the…
Marginal Profit
What is Marginal Profit? Marginal profit refers to the profit earned by a business when an additional unit is produced and sold. Under the mainstream economic theory, the marginal approach to profit maximization states that if a company chooses to maximize its profits, it should continue producing a good or service up to the point…
Marginal Utility
What is Marginal Utility? Marginal utility refers to the additional benefit derived from consuming one more unit of a specific good or service. Consuming units can result in positive, negative, or zero marginal utility. Utility is not constant, and for every additional unit consumed, often the consumer experiences what economists refer to as the diminishing…
