Rally
An upward movement of prices. Opposite of recovery. Related: Recovery
Range
The high and low prices, or high and low bids and offers recorded during a specified time.
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.
Reaction
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.
Refunding
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- gage-backed security.
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.
Reserve
An accounting entry that properly reflects the contingent liabilities of an insurance company.
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 changes.
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 corporation.
Return
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 total assets.
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 bonds.
Revenue fund
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
Rings
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 U.S. government.
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 maturity.
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.
Round-turn
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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