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Three measures of the money supply as defined by the Federal Reserve Board:

M1 is the narrowest measure of money supply. It includes currency in circulation, checking account balances, NOW accounts and share draft accounts at credit unions, and travelers’ checks. M1 represents all money that can be spent or readily converted to cash for immediate spending.

M2 includes everything in M1 plus savings accounts and time deposits such as CDs, money market deposit accounts, and repurchase agreements.

M3 includes everything in M2 plus large CDs and money market fund balances held by institutions. M3 is the broadest measure of money supply tracked by the Fed.

Federal Reserve policymakers carefully watch the growth rate of all three money supply measures, but especially M2, as key indicators of economic growth and potential for inflation. Most economists maintain that most economic growth and inflation is determined by the rate of growth in the money supply.


Charge against investor assets for managing the portfolio of an open- or closed-end mutual fund as well as for such services as shareholder relations or administration. The fee, as disclosed in the prospectus, is a fixed percentage of the fund’s net asset value, typically between 0.5% and 2% per year. The fee also applies to a managed account. The management fee is deducted automatically from a shareholder’s assets once a year.


The cash deposit against a paper contract payable as a guarantee. An initial payment is usually made and thereafter further margin requirements (margin call) may have to be met depending on the performance of the contract throughout its life.


The premium over the spot gold price applied to jewellery and other investment products.


A theory on how risk-averse investors can construct portfolios in order to optimize market risk for expected returns, emphasizing that risk is an inherent part of higher reward. Also called portfolio theory or portfolio management theory.

According to the theory, it's possible to construct an 'efficient frontier' of optimal portfolios offering the maximum possible expected return for a given level of risk. This theory was pioneered by Harry Markowitz in his paper "Portfolio Selection," published in 1952 by the Journal of Finance.

There are four basic steps involved in the portfolio construction: -Security Valuation -Asset Allocation -Portfolio Optimization -Performance Measurement


A commodity or asset, such as gold, an officially issued currency, coin, or paper note, that can be legally exchanged for something equivalent, such as goods or services.

As defined by common law: a medium of exchange authorized or adopted by a domestic or foreign government and includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more nations.

Legal tender as defined by a government and consisting of currency and coin. In a more general sense, money is synonymous with cash, which includes negotiable instruments, such as checks, based on bank balances.

According to the US Constitution and US law, money is defined as “gold and silver bullion coin” exclusively of all else. In the vernacular, “money” is used interchangeably with “currency” even though the true definitions are quite different from each other.