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1 Macaulay Duration

The percent change in a bond’s price for a given percent change in one plus the bond’s yield. This calculation can be interpreted as the weighted average life of the bond, with the weights being the percentage of the bond’s value due to each payment. A key assumption to this duration is that the yield curve is flat and that when rate changes, the yield curve shifts in a parallel fashion. [See also Duration and Modified duration]

2 Macroforecasting

Forecasts of price movements of the general stock market as a whole.

3 Macrohedge

A hedge strategy designed to reduce risk associated with a bank’s entire balance sheet position. In other words, a financial institution manager wishes to use futures or other derivative securities to hedge the entire balance sheet duration gap.

4 Mail Float

Refers to the part of the collection and disbursement process where checks are trapped in the postal system [See also Float]

5 Maintenance Margin

Due to the difficulty of calling all...