What are Material Participation Tests? Material participation tests are a set of criteria that the Internal Revenue Service (IRS) uses to determine if an individual actively participated in a business, trade, or other income-producing activity. A taxpayer must pass at least one of the several material participation tests to be considered a material participant. Understanding…
What is the Maximum Loan Amount? The maximum loan amount refers to the highest amount that a financial institution or a bank authorizes an applicant to borrow. The maximum loan amount is applicable to credit cards, standard loans, and line-of-credit accounts. Understanding the Maximum Loan Amount There are several factors that come into play when…
What is Maximum Foreseeable Loss? A maximum foreseeable loss is an insurance term that refers to the worst possible scenario where the claim for damages and loss is the highest. It means that the damages suffered by the insured party are significant, and he/she needs the highest possible payout to restore them to their previous…
What is Max Pain (Options)? Max pain is a situation in which the stock price locks in on an option strike price as it nears expiration, which would cause financial losses for the highest possible number of options traders. It attempts to explain how, during the last days, the underlying stock prices often cluster around…
What is a Mature Industry? A mature industry is an industry that has passed the introduction stage, growth stage, and shake out stage, but has not yet reached the declining stage. A mature industry is a stage in the industry life cycle that includes five stages – introduction, growth, shakeout, maturity, and decline – and…
What is a Medallion Signature Guarantee? A medallion signature guarantee is a certification stamp that lenders – such as banks and other financial institutions – provide to allow investors to transfer ownership of securities. It will generally be required by parties when the owner intends to transfer securities. The medallion signature guarantee protects…
What is Melt Up? Melt up is a financial term that refers to a sharp improvement in the performance of the stock market due to reasons other than fundamental improvements in the economy. The improvement in investment performance is mainly driven by investor sentiment, where investors flock into buying stocks because they notice the market…
What is Mental Accounting? The mental accounting concept was introduced by Richard Thaler in a paper titled “Mental Accounting Matters,” which was published in the Journal of Behavioral Decision Making. Thaler noted that people place the value of money differently, and it exposes them to irrational decision-making. In simple terms, the concept states that individuals…
What is MasterCard? MasterCard is a technology firm in the global electronic payment industry responsible for processing electronic payments, through its full range of payment programs and services. It partners with various institutions worldwide to connect different participants in various types of transactions, including businesses, financial institutions, merchants, and consumers using its branded electronic payment…
What is Dragonfly Doji Candlestick? A dragonfly doji candlestick is a candlestick pattern with the open, close, and high prices of an asset at the same level. A dragonfly doji pattern does not appear constantly. It is used as a technical indicator that signals a potential reversal of the asset’s price. What is a Doji…
