R squared: The square of the correlation coefficient is the proportion of the var ...

R&D: Research and Development

Rally (recovery): An upward movement of prices. Opposite of reaction.

RAMs (Reverse-annuity mortgages): Mortgages in which the bank makes a loan for an amount equal to a per ...

Random Sampling: A sampling scheme whereby each observation is drawn from the populatio ...

Random variable: A function that assigns a real number to each and every possible outco ...

Random walk: Theory that stock price changes from day to day are at random; the cha ...

Randomized strategy: A strategy of introducing into the decision-making process a random el ...

Range: The high and low prices, or high and low bids and offers recorded duri ...

Range forward: A forward exchange rate contract that places upper and lower bounds on ...

RAROC: Refers to the Risk Adjusted Return on Capital. RAROC methodo ...

Ratchet: A provision often found in a terms sheet. A ratchet gives an investor ...

Rate anticipation swaps: An exchange of bonds in a portfolio for new bonds that will achieve th ...

Rate lock: An agreement between the mortgage banker and the loan applicant guaran ...

Rate of interest: The rate, as a proportion of the principal, at which interest is compu ...

Rate of return ratios: Ratios that are designed to measure the profitability of the firm in r ...

Rate risk: In banking, the risk that profits may decline or losses occur because ...

Ratings: An evaluation of credit quality Moody's, S&P, and Fitch Investors Serv ...

Rational expectations: The idea that people rationally anticipate the future and respond to w ...

Rationality: In game theory, one of the most common assumptions made is that every ...



Raw material supply agreement: As used in connection with project financing, an agreement to furnish ...

Reaction: A decline in prices following an advance. Opposite of rally.

Reaganomics: A school of thought within the economics profession emphasizing that t ...

Real assets: Identifiable assets, such as buildings, equipment, patents, and tradem ...

Real capital: Wealth that can be represented in financial terms, such as savings acc ...

Real cash flow: A cash flow is expressed in real terms if the current, or date 0, purc ...

Real exchange rates: Exchange rates that have been adjusted for the inflation differential ...

Real interest rate: The rate of interest excluding the effect of inflation; that is, the r ...

Real market: The bid and offer prices at which a dealer could do "size." Quotes in ...

Real option: An option involving real (as opposed to financial) assets where. Real ...

Real time: A real time stock or bond quote is one that states a security's most r ...

Realized compound yield: Yield assuming that coupon payments are invested at the going market i ...

Realized return: The return that is actually earned over a given time period.

Rebalancing: Realigning the proportions of assets in a portfolio as needed.

Receivables balance fractions: The percentage of a month's sales that remain uncollected (and part of ...

Receivables turnover ratio: Total operating revenues divided by average receivables. Used to measu ...

Receiver: A bankruptcy practitioner appointed by secured creditors in the United ...

Receivership: When a company is sick (financially speaking) and cannot meet its paym ...

Reclamation: A claim for the right to return or the right to demand the return of a ...

Record date: (a) Date by which a shareholder must officially own shares in order to ...



Recourse: Term describing a type of loan. If a loan is with recourse, the lender ...

Red herring: A preliminary prospectus containing information required by the SEC. I ...

Redeemable: Eligible for redemption under the terms of the indenture.

Redemption charge: The commission charged by a mutual fund when redeeming shares. For exa ...

Redemption cushion: The percentage by which the conversion value of a convertible security ...

Redemption Fee: A charge assessed against an invetor for redeeming shares or interests ...

Reference rate: A benchmark 'interest rate (such as LIBOR), used to specify conditions ...

Reflation: Policies to pump up demand and thus boost the level of economic activi ...

Refundable: Eligible for refunding under the terms of indenture.

Refunded bond: Also called a prerefunded bond, one that originally may have been issu ...

Refunding: The redemption of a bond with proceeds received from issuing lower-cos ...

Regional fund: A mutual fund that invests in a specific geographical area overseas, s ...

Registered bond: A bond whose issuer records ownership and interest payments. Differs f ...

Registered representative: A person registered with the US CFTC who is employed by, and solicitin ...

Registered trader: A member of the exchange who executes frequent trades for his or her o ...

Registrar: The Registrar of Companies, a governmental body controlling the format ...

Registration statement: A legal document that is filed with the SEC to register securities for ...

Regression analysis: A statistical technique that can be used to estimate relationships bet ...

Regression equation: An equation that describes the average relationship between a dependen ...

Regression toward the mean: The tendency for subsequent observations of a random variable to be cl ...



Regressive tax: A tax that tends to take a larger percentage of the incomes of lower i ...

Regular way settlement: In the money and bond markets, the regular basis on which some securit ...

Regulation A: The securities regulation in the US that exempts small public offering ...

Regulation D: Fed regulation currently that required member banks to hold reserves a ...

Regulation M: Fed regulation currently requiring member banks to hold reserves again ...

Regulation Q: US Federal regulation imposing caps on the rates that banks may pay on ...

Regulatory accounting procedures: Accounting principals required by the FHLB that allow S&Ls to elect a ...

Regulatory pricing risk: Risk that arises when regulators restrict the premium rates that insur ...

Regulatory surplus: The surplus as measured using regulatory accounting principles (RAP) w ...

Reinvestment rate: The rate at which an investor assumes interest payments made on a debt ...

Reinvestment risk: The risk that proceeds received in the future will have to be reinvest ...

Reinvestment risk on bonds: Usually, when the yield of a bond is calculated, you assume that the c ...

Reinvoicing center: A central financial subsidiary used by an MNC to reduce transaction ex ...

REIT (real estate investment trust): Real estate investment trust, which is similar to a closed-end mutual ...

Relative purchasing power parity (RPPP): Idea that the rate of change in the price level of commodities in one ...

Relative strength: A stock's price movement over the past year as compared to a market in ...

Relative value: The attractiveness measured in terms of risk, liquidity, and return of ...

Relative yield spread: The ratio of the yield spread to the yield level.

Remainderman: One who receives the principal of a trust when it is dissolved.

Remaining maturity: The length of time remaining until a bond's maturity.

Remaining principal balance: The amount of principal dollars remaining to be paid under the mortgag ...

Rembrandt bonds: Foreign bonds issued in Netherlands.

Rembrandt market: The foreign market in the Netherlands.

REMIC (real estate mortgage investment conduit): A pass-through tax entity that can hold mortgages secured by any type ...

Remote disbursement: Technique that involves writing checks drawn on banks in remote locati ...

Remuneration and Nomination Committee: A committee that advises the Supervisory Board in a company on compens ...

Reoffering yield: In a purchase and sale, the yield to maturity at which the underwriter ...

Reopen an issue: The Treasury, when it wants to sell additional securities, will occasi ...

Reorganization: Creating a plan to restructure a debtor's business and restore its fin ...

Replacement cost: Cost to replace a firm's assets.

Replacement cost: What it would cost today to replace a company’s existing assets.

Replacement cycle: The frequency with which an asset is replaced by an equivalent asset.

Replacement value: Current cost of replacing the firm's assets.

Replacement-chain problem: Idea that future replacement decisions must be taken into account in s ...

Replicating portfolio: A portfolio constructed to match an index or benchmark.

Repo: A repo is a repurchase agreement. A procedure for borrowing money by s ...

Repo rate: The interest rate in a repo transaction.

Reported factor: The pool factor as reported by the bond buyer for a given amortization ...

Reporting currency: The currency in which the parent firm prepares its own financial state ...

Reproducible assets: A tangible asset with physical properties that can be reproduced, such ...

Repurchase agreement: An agreement with a commitment by the seller (dealer) to buy a securit ...

Repurchase of stock: Device to pay cash to firm's shareholders that provides more preferabl ...

Required reserves: The dollar amounts based on reserve ratios that banks are required to ...

Required return: The minimum expected return you would require to be willing to purchas ...

Required yield: Generally referring to bonds, the yield required by the marketplace to ...

Reserve: An accounting entry that properly reflects the contingent liabilities.

Reserve currency: A foreign currency held by a central bank or monetary authority for th ...

Reserve ratios: Specified percentages of deposits, established by the Federal Reserve ...

Reserve requirements: The percentage of different types of deposits that member banks are re ...

Reset frequency: The frequency with which the floating rate changes.

Residual assets: Assets that remain after sufficient assets are dedicated to meet all s ...

Residual dividend approach: An approach that suggests that a firm pay dividends if and only if acc ...

Residual losses: Lost wealth of the shareholders due to divergent behavior of the manag ...

Residual method: A method of allocating the purchase price for the acquisition of anoth ...

Residual value: Usually refers to the value of a lessor's property at the time the lea ...

Residuals: (a) Parts of stock returns not explained by the explanatory variable ( ...

Resistance level: A price level above which it is supposedly difficult for a security or ...

Restrictive covenants: Provisions that place constraints on the operations of borrowers, such ...

Restrictive practice: A general term for anything done by a company, or companies, to inhibi ...

Retail: Individual and institutional customers as opposed to dealers and broke ...

Retail credit: Credit granted by a firm to consumers for the purchase of goods or ser ...

Retail investors individual investors: Small investors who commit capital for their personal account.

Retained Earnings: The retained earnings are the net profits kept to accumulate in a busi ...

Retention rate: The percentage of present earnings held back or retained by a corporat ...

Retire: To extinguish a security, as in paying off a debt.

Retracement: A price movement in the opposite direction of the previous trend.

Return: The change in the value of a portfolio over an evaluation period, incl ...

Return on assets (ROA): Indicator of profitability. Determined by dividing net income for the ...

Return on equity (ROE): Indicator of profitability. Determined by dividing net income for the ...

Return on investment (ROI): Generally, book income as a proportion of net book value.

Return on total assets: The ratio of earnings available to common stockholders to total assets ...

Return-to-maturity expectations: A variant of pure expectations theory which suggests that the return t ...

Revaluation: An increase in the foreign exchange value of a currency that is pegged ...

Revenue bond: A bond issued by a municipality to finance either a project or an ente ...

Revenue fund: A fund accounting for all revenues from an enterprise financed by a mu ...

Revenue Reconciliation Act of 1995: Proposed changes to the Internal Revenue Code affecting foreign trust ...

Reverse price risk: A type of mortgage-pipeline risk that occurs when a lender commits to ...

Reverse repo: In essence, refers to a repurchase agreement. From the customer's pers ...

Reverse stock split: A proportionate decrease in the number of shares, but not the value of ...

Reverse Takeover (RTO): A reverse takeover is one way of going public. A public company can ta ...

Reversing trade: Entering the opposite side of a currently held futures position to clo ...

Revolving credit agreement: A legal commitment wherein a bank promises to lend a customer up to a ...

Revolving line of credit: A bank line of credit on which the customer pays a commitment fee and ...

Reward-to-volatility ratio: Ratio of excess return to portfolio standard deviation.

Riding the yield curve: Buying long-term bonds in anticipation of capital gains as yields fall ...

Right: A short-lived (typically less than 90 days) call option for purchasing ...

Rights issue: An new share issue to existing shareholders giving them the right to b ...

Rights-on: Shares trading with rights attached to them.

Rings: Trading arenas located on the floor of an exchange in which traders ex ...

Risk: Typically defined as the standard deviation of the return on total inv ...

Risk arbitrage: The practice of buying the stock of takeover targets after a merger is ...

Risk averse: A risk-averse investor is one who, when faced with two investments wit ...

Risk Capital: Money put up by ordinary shareholders, an individual entrepreneur or v ...

Risk classes: Groups of projects that have approximately the same amount of risk.

Risk controlled arbitrage: A self-funding, self-hedged series of transactions that generally util ...

Risk indexes: Categories of risk used to calculate fundamental beta, including (a) m ...

Risk lover: A person willing to accept lower expected returns on prospects with hi ...

Risk management: The process of identifying and evaluating risks and selecting and mana ...

Risk neutral: Insensitive to risk.

Risk premium: The reward for holding the risky market portfolio rather than the risk ...

Risk premium approach: The most common approach for tactical asset allocation to determine th ...

Risk prone: Willing to pay money to transfer risk from others.

Risk-adjusted profitability: A probability used to determine a "sure" expected value (sometimes cal ...

Risk-adjusted return: Return earned on an asset normalized for the amount of risk associated ...

Risk-adjusted return on capital (RAROC): Measures performance on a risk-adjusted basis. Calculated as the econo ...

Risk-free asset: An asset whose future return is known today with certainty.

Risk-free rate: The rate earned on a riskless asset.

Riskless arbitrage: The simultaneous purchase and sale of the same asset to yield a profit ...

Riskless rate of return: The rate earned on a riskless asset.

Risky asset: An asset whose future return is uncertain.

ROIC: Return on invested capital. This ratio is commonly used to assess the ...

ROL: Romanian Leu from Romania.

Roll over: Reinvest funds received from a maturing security in a new issue of the ...

Rollover: Most term loans in the Euromarket are made on a rollover basis, which ...

Round lot: A trading order typically of 100 shares of a stock or some multiple of ...

Round-trip transactions costs: Costs of completing a transaction, including commissions, market impac ...

Round-turn: Procedure by which the Long or short position of an individual is offs ...

Rule 144a: SEC rule allowing qualified institutional buyers to buy and trade unre ...

Rule 415: Rule enacted in 1982 that permits firms to file shelf registration sta ...

Rule-of-72: This is a very handy "rule" that lets you mentally calculate how long ...

Run: A run consists of a series of bid and offer quotes for different secur ...

RUR: Russian Federation Rouble from the Russian Federation. The ru ...

RWF: Rwandian Franc from Rwanda.

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