- An upward movement of prices. Opposite of recovery. Related: Recovery
- The high and low prices, or high and low bids and offers recorded during a
- Rate anticipation swaps
- An exchange of bonds in a portfolio for new bonds that will
achieve the target portfolio duration, based on the investor's assumptions about future
changes in interest rates.
- A decline in prices following an advance. Opposite of rally. Related: Rally
- Reference rate
- A benchmark 'interest rate (such as LMOR), used to specify conditions
of an interest rate swap or an interest rate agreement.
- Refunded bond
- Also called a prerefunded bond, one that originally may have been
issued as a general obligation or revenue bond but that is now secured by an "escrow
fund" consisting entirely of direct U.S. government obligations that are sufficient for
paying the bondholders.
- The redemption of a bond with proceeds received from issuing lower-cost
debt obligations ranking equal to or superior to the debt to he redeemed.
- Registered representative
- A person registered with the CFTC who is employed by,
and soliciting business for, a commission house or futures commission
merchant. Related: CFTC, Futures commission merchant
- Regression analysis
- A statistical technique that can be used to estimate
relationships between variables.
- Regulatory pricing risk
- Risk that arises when regulators restrict the premium rates
that insurance companies can charge.
- egulatory surplus
- The surplus as measured using regulatory accounting principles
(RAP) which may allow the non-market valuation of assets or liabilities and which may
be materially different from economic surplus.
- Reinvestment risk
- The risk that proceeds received in the future will have to be
reinvested at a lower potential interest rate.
- Relative strength
- Also called price momentum or price persistence, the ratio of the
price of a stock to some price index. Changes in the ratio can be interpreted as
uptrends or downtrends relative to the price index.
- Relative yield spread
- The ratio of the yield spread to the yield level.
- Rembrandt market
- The foreign market in the Netherlands.
- Replicating portfolio
- A portfolio constructed to match an index or benchmark.
- Reproducible assets
- A tangible asset with physical properties that can be
reproduced, such as a building or machinery.
- Repurchase agreement
- An agreement with a commitment by the seller to buy a
security back from the purchaser at a specified price at a designated future date. Also
called a repo, it represents a collateralized short-term loan, where the collateral may
be a Treasury security, money market instrument, federal agency security, or mort-
- Required reserves
- The dollar amounts based on reserve ratios that banks are
required to keep on deposit at a Federal Reserve Bank.
- Required yield
- Generally referring to bonds, the yield required by the marketplace to
match available returns for financial instruments with comparable risk.
- An accounting entry that properly reflects the contingent liabilities of an
- Reserve ratios
- Specified percentages of deposits, established by the Federal
Reserve Board, that banks must keep in a non-interest-bearing account at one of the
twelve Federal Reserve Banks.
- Reset frequency in an interest rate swap
- The frequency with which the floating rate
- Residual claim
- Related: Equity claim
- Residual risk
- Related: Unsystematic risk
- Retail investors Individual investors.
- Institutional investors
- Retention rate
- The percentage of present earnings held back or retained by a
- The change in the value of a portfolio over an evaluation period, including
any distributions made from the portfolio during that period.
- Return on stockholders' equity
- The ratio of earnings to stockholders' equity.
- Return on total assets
- The ratio of earnings available to common stock holders to
- Return-to-maturity expectations interpretation
- A variant of pure expectations theory
which suggests that the return that an investor will realize by rolling over short-term
bonds to some investment horizon will be the same as holding a zero-coupon bond
with a maturity that is the same as that investment horizon.
- Revenue bond
- A bond issued by a municipality to finance either a project or an
enterprise where the issuer pledges to the bondholders the revenues generated by the
operating projects financed, for instance, hospital revenue bonds and sewer revenue
- Revenue fund
- A fund accounting for all revenues from an enterprise financed by a
municipal revenue bond.
- Trading arenas located on the floor of an exchange in which traders execute
orders. Sometimes called a pit. Related: Pit
- Risk averse
- A risk-averse investor is one who when faced with two investments with
the same expected return but two different risks will prefer the one with the lower risk.
- Risk-free or riskless asset
- An asset whose future return is known today with
certainty. The risk free asset is commonly defined as short-term obligations of the
- Risk indexes
- Categories of risk used to calculate fundamental beta, including (1)
market variability, (2) earnings variability, (3) low valuation and unsuccess, (4)
immaturity and smallness, (5) growth orientation, and (6) financial risk.
- Risk premium
- The reward for holding the risky market portfolio rather than the risk-
free asset. The spread between Treasury and non-Treasury bonds of comparable
- Risk premium approach
- The most common approach for tactical asset allocation to
determine the relative valuation of asset classes based on expected returns.
- Risky asset
- An asset whose future return is uncertain.
- Round lot
- A trading order typically of 100 shares of a stock or some multiple of
100. Related: Odd lot
- Round-trip transactions costs
- Costs of completing a transaction, including
commissions, market impact costs, and taxes.
- Procedure by which the long or short position of an individual is offset
by an opposite transaction or by accepting or making delivery of the actual financial
instrument or physical commodity.
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