FINANCIAL DICTIONARY-R

R
A Nasdaq stock symbol specifying that the stock has rights.

R-Squared
A statistical measure that represents the percentage of a fund's or security's movements that are explained by movements in a benchmark index. For fixed-income securities the benchmark is the T-bill, and for equities the benchmark is the S&P 500.

Rabbi Trust
A trust created for the purpose of supporting the non-qualified benefit obligations of employers to their employees.
These trusts are sometimes referred to as "grantor trusts".

Raider
An individual or organization who tries to take over a company by initiating a hostile takeover bid.

Rain Check
A promise or commitment by a seller to a buyer that an item currently out of stock can be purchased at a later date for today's sale price.

Rainbow Option
A single option linked to two or more underlying assets. In order for the option to pay off,

Rainmaker
An employee of a brokerage firm who brings a large amount of wealthy individuals or corporations to the brokerage firm's client base.

Rally
A period of sustained increases in the prices of stocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally, respectively. However, a rally will generally follow a period of flat or declining prices.

Rally (and False Rally)
An attempt by a stock or the general market to turn and advance in price after a period of decline. Successful rallies are usually identified by more consistent price increases on greater than normal volume. False rallies are generally signified by increases in price but a lack of big or increased volume, indicating absence of large buying in the market. False rallies frequently either do not last as long or do not recover as much in price.

Ramp Up
To increase a company's operations in anticipation of increased demand.

Random Walk Theory
The theory that stock price changes have the same distribution and are independent of each other, so the past movement or trend of a stock price or market cannot be used to predict its future movement.

Range-Bound Trading
A trading strategy that identifies stocks trading in channels. By finding major support and resistance levels with technical analysis, a trend trader buys stocks at the lower level of support (bottom of the channel) and sells them near resistance (top of the channel).

Rate Anticipation Swap
A type of swap in which bonds are swapped according to their current duration and predicted interest rate movements.

Rate Level Risk
A type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time. Although interest rates are expected to fluctuate over the period of an investment, the probability of an interest rate change is not always constant, nor is the magnitude of the volatility of interest rate changes

Rate Of Change
The speed at which a variable changes over a specific period of time. Rate of change is often used when speaking about momentum, and it can generally be expressed as a ratio between a change in one variable relative to a corresponding change in another. Graphically, the rate of change is represented by the slope of a line.

Rate Of Return
The gain or loss of an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be any income received from the security, plus realized capital gains.

Rating
1. An evaluation of a corporate or municipal bond's relative safety from an investment standpoint. Basically, it scrutinizes the issuer's ability to repay principal and make interest payments.
2. An analyst's recommendation on whether to buy, sell or hold a specific stock.

Ratings Service
A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends.

Ratio Analysis
A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis

Ratio Spread
An options strategy in which an investor simultaneously holds an unequal number of long and short positions. A commonly used ratio is two short options for every option purchased.

Rational Expectations Theory
An economic idea that the people in the economy make choices based on their rational outlook, available information and past experiences. The theory suggests that the current expectations in the economy are equivalent to what the future state of the economy will be. This contrasts the idea that government policy influences the decisions of people in the economy.

Rationalization
A reorganization of a company in order to increase its efficiency. This reorganization may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy pertaining to particular products.

Razor - Razorblade Model
A business tactic involving the sale of dependent goods for different prices - one good is sold at a discount, while the second dependent good is sold at a considerably higher price.

Reaction
The typical downward movement in the price of a security after the price had previously risen.

Reaganomics
A popular term used to refer to the economic policies of Ronald Reagan, the 40th U.S. President (1981-1989), which called for widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets.

Real Asset
Physical or identifiable assets such as gold, land, equipment, patents, etc. They are the opposite of a financial asset.

Real Body
In candlestick charting this is the wide part of a candle that represents the range between the opening and the closing prices over a specific time period.

Real Economic Growth Rate
A measure of economic growth from one period to another expressed as a percentage and adjusted for inflation (i.e. expressed in real as opposed to nominal terms). The real economic growth rate is a measure of the rate of change that a nation's gross domestic product (GDP) experiences from one year to another. Gross national product (GNP) can also be used if a nation's economy is heavily dependent on foreign earnings.

Real Effective Exchange Rate - REER
The weighted average of a country's currency relative to an index or basket of other major currencies adjusted for the effects of inflation. The weights are determined by comparing the relative trade balances, in terms of one country's currency, with each other country within the index.

Real Estate
Land plus anything permanently fixed to it, including buildings, sheds and other items attached to the structure.

Real Estate Investment Trust - REIT
A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.
REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.
Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties' rents.
Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans.
Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.

Real Estate Limited Partnership
A direct participation program formed to build new structures and generate income from existing property, or profit from the capital appreciation of undeveloped land.

Real Estate Mortgage Investment Conduits - REMIC
A complex pool of mortgage securities created for the purpose of acquiring collateral. This base is then divided into varying classes of securities backed by mortgages with different maturities and coupons.

Real Estate Owned
Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most foreclosure auctions equal the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale.

Real Estate Owned
Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most foreclosure auctions equal the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale.

Real Income
The income of an individual or group after taking into consideration the effects of inflation on purchasing power. For example, if you received a 2% salary rise over the previous year and inflation for the year was 1%, then your real income only rose 1%. Conversely, if you received a 2% raise in salary and inflation stood at 3%, then your real income would have shrunk 1%. Also known as "real wages".

Real Interest Rate
The amount by which the nominal interest rate is higher than the inflation rate.

Real Option
An alternative or choice that becomes available with a business investment opportunity

Real Rate Of Return
The annual percentage return realized on an investment adjusted for changes in prices due to inflation or deflation.
Real Time Gross Settlement - RTGS
The continuous settlement of payments on an individual order basis without netting debits with credits across the books of a central bank.

Real-Estate Agent
A person with a state/provincial license to represent a buyer or a seller in a real-estate transaction in exchange for commission. Most agents work for a real-estate broker or realtor.

Real-Time Trade Reporting
A requirement imposed on market makers (and in some instances, non market makers) to report each trade immediately after the transaction is completed.

Realized Gain
A gain resulting from selling an asset at a price higher than the original purchase price.

Realized Loss
A loss recognized when assets are sold for a price lower than the original purchase price.

Reallowance
In securities underwriting, the fee that the underwriting group pays to a securities firm that isn't part of the syndicate, but who still sells shares in the offering.

Realtor
In the United States a designation used to describe a member of the National Association of Realtors (NAR).

Reassessment
The process of re-determining the value of property or land for tax purposes.

Rebalancing
The process of realigning the weightings of one's portfolio of assets.

Rebate
1. In a short-sale transaction, the portion of interest or dividends earned by the owner (lender) of shares that are paid to the short seller (borrower) of the shares.
2. In an options transaction, the amount paid to the holder of the option if the option expires worthless.

Rebate Barrier Option
A barrier option that offers a predetermined rebate, should the option be 'knocked-out.'

Recapitalization
Restructuring a company's debt and equity mixture, most often with the aim of making a company's capital structure more stable. Essentially, the process involves the exchange of one form of financing for another, such as removing preferred shares from the company's capital structure and replacing them with bonds.

Recapture
1. A condition set by the seller of an asset that gives him/her the right to purchase back some or all of the assets within a certain period of time.
2. A situation where an individual must add back a deduction from a previous year to their income.

Receivables
An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed to the company, even if the debts are not currently due.

Receivables Turnover Ratio
An accounting measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.
Formula:
Some companies' reports will only show sales - this can affect the ratio depending on the size of cash sales.

Receive Versus Payment - RVP
An instruction accompanying sell orders, stating that only cash will be accepted in exchange for delivery of the securities.

Receiver
A person appointed by a bankruptcy court or secured creditor to run a company for a short period of time in a manner that will ensure as much debt is paid back to creditors as possible.
Receivership
A type of bankruptcy a company enters when a receiver is appointed by bankruptcy courts or creditors to run the company.

Recession
A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).

Recharacterization
The treatment of a contribution as being made to another type of IRA instead of the IRA that the contribution was initially made.

Reclassification
The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event.

Recognized Gain
The amount of gain reported for income tax purposes.

Recognized Loss
The amount of loss reported for income tax purposes.

Reconversion
A method used by individuals to minimize the tax burden of converting by recharacterizing Roth IRA-converted amounts back to a Traditional IRA and then converting these assets back to a Roth IRA again. Be aware that the IRS released regulations in 1999 placing limits on reconversions.

Record Date
The date established by an issuer of a security for the purpose of determining the holders who are entitled to receive a dividend or distribution

Recording Fee
The fee a government charges for reporting a real estate purchase or sale into the public record

Recurring Revenue
The portion of a company's revenue that is highly likely to continue in the future. This is revenue that is predictable, stable and can be counted on in the future with a high degree of certainty.

Red
A term relating to a negative balance on a company's financial statements.

Red Chip
A company incorporated and listed in Hong Kong with controlling Chinese shareholders.

Red Flag
An indicator of potential problems with a security. Most often used to refer to a stock, a red flag can be any undesirable characteristic that stands out to an analyst. There is no universal standard for identifying red flags the method used will depend on the investment methodology being employed.

Red Herring
A preliminary registration statement that must be filed with the SEC describing a new issue of stock and the prospects of the issuing company

Redemption
The return of an investor's principal in a security, such as a stock, bond, or mutual fund.

Redenomination
1. The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons.
2. The process of changing the currency value on a financial security.

Redeposit
1. The requirement for a person to reinvest a certain amount of money into their retirement fund after he or she previously requested and obtained a return on the deposits made to the fund during a set time period, in order to receive a certain payout from the fund upon retirement.
2. A cash management policy used by the Bank of Canada, where money is transferred from the central bank to the chartered banks.

Registration
1. The process by which a company files required documents with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information about its business during the registration process, including a business and asset description, a description of the security being offered and the details of that offering, a description and names of the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company.
2. The process by which securities brokers or dealers become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must become a member of a self-regulatory organization such as the NASD, be registered with the state or states in which he or she intends to sell securities if such state laws require him or her to do so, and finally, be or become a member of the Security Investor Protection Corporation.

Redlining
The unethical practice whereby financial institutions either flat out deny or make it extremely difficult for residents of poor inner-city neighborhoods to borrow money, gain approval for a mortgage, take out insurance or gain access to other financial services because of high default rates. In this case, the rejection does not take the individual's qualifications and creditworthiness into account. The federal Community Reinvestment Act was passed in 1977 to put an end to all redlining practices, but critics say the discrimination still occurs.

Registration Right
A contractual right giving investors holding restricted stock the ability to demand that the issuing company register the shares to the SEC, effectively making the stock available for sale to the public.

Regression
A statistical measure that attempts to determine the strength of the relationship between one dependent variable (usually denoted by Y) and a series of other changing variables (known as independent variables). The two basic types of regression are linear regression and multiple regression. Linear regression uses one independent variable to explain and/or predict the outcome of Y, while multiple regression uses two or more independent variables to predict the outcome. The general form of each type of regression is:
Linear Regression: Y = a + bX + u
Multiple Regression: Y = a + b

Regressive Tax
A tax that takes a larger percentage from the income of low-income people than the income of high-income people.

Reference Rate
The underlying index or rate upon which a floating-rate security is based.

Refinance
1. When a business or person revises their payment schedule for repaying debt.
2. Replacing an older loan with a new loan offering better terms.

Refinancing Risk
A type of risk that a borrower faces when the actual cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments.

Reflation
An economic policy whereby a government uses fiscal or monetary stimulus in order to expand a country's output

Refinance
1. When a business or person revises their payment schedule for repaying debt.
2. Replacing an older loan with a new loan offering better terms.

Refinancing Risk
A type of risk that a borrower faces when the actual cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments

Refinancing Risk
A type of risk that a borrower faces when the actual cost of extending or reborrowing funds may exceed the predicted cost of financing. Refinancing risk can occur whenever an investor possesses short-term liabilities and longer term investments

Refund
A payment from the government for an individual's overpaid taxes. An individual in this situation is said to be "over-withholding." Federal income tax refunds are not taxable.

Refundable Credit
A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond this and so really can be considered the same as a payment.

Refunded Bond
A bond, originally issued as a regular or revenue bond, that is now secured by a second issue of bonds which are held in an "escrow fund" consisting of U.S. government debt until the first bond issue reaches maturity.

Refunding
Retiring an outstanding bond issue at maturity by using money from the sale of a new offering.

Refunded Bond
A bond, originally issued as a regular or revenue bond, that is now secured by a second issue of bonds which are held in an "escrow fund" consisting of U.S. government debt until the first bond issue reaches maturity.

Regional Fund
A mutual fund that confines itself to investments in securities from a specified geographical area, such as Latin America, Europe or Asia. A regional mutual fund will generally look to own a diversified portfolio of companies based in and operating out of its specified geographical area. However, some regional funds can also be set up to invest in a specific segment of the region's economy, such as energy.

Regional Stock Exchange
Any exchange located outside a country's main financial center.

Registered Education Savings Plan - RESP
A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings - tax-free because subscribers cannot deduct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG).

Refunding
Retiring an outstanding bond issue at maturity by using money from the sale of a new offering.

Regional Fund
A mutual fund that confines itself to investments in securities from a specified geographical area, such as Latin America, Europe or Asia. A regional mutual fund will generally look to own a diversified portfolio of companies based in and operating out of its specified geographical area. However, some regional funds can also be set up to invest in a specific segment of the region's economy, such as energy.

Regional Stock Exchange
Any exchange located outside a country's main financial center.

Registered Education Savings Plan - RESP
A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings - tax-free because subscribers cannot deduct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG).

Registered Investment Advisor - RIA
An advisor, registered with the Securities and Exchange Commission, who manages the investments of others

Registered Options Trader
An individual working on the floor of an exchange whose function it is to watch a number of options traded on the exchange to ensure that they are being traded fairly, in fair market conditions. The individual may trade for him/herself or for other parties, but is under no obligation to 'make a market' for any options traded on the exchange.

Registered Pension Plan - RPP
A form of a trust that provides pension benefits for an employee of a company upon retirement. RPPs are registered with the Canada Revenue Agency. The employee and employer, or just the employer make contributions to this retirement plan until the employee leaves the company or retires.

Registered Representative (RR)
A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive for clients trading investment products such as stocks, bonds and mutual funds. Also known as an "account executive".
It is also refers to a person registered with the Commodity Futures Trading Commission (CFTC) who works for a commission house or a futures commission merchant.

Regional Stock Exchange
Any exchange located outside a country's main financial center.

Registered Education Savings Plan - RESP
A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings - tax-free because subscribers cannot deduct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG

Registered Investment Advisor - RIA
An advisor, registered with the Securities and Exchange Commission, who manages the investments of others.

Registered Options Trader
An individual working on the floor of an exchange whose function it is to watch a number of options traded on the exchange to ensure that they are being traded fairly, in fair market conditions. The individual may trade for him/herself or for other parties, but is under no obligation to 'make a market' for any options traded on the exchange.

Registered Pension Plan - RPP
A form of a trust that provides pension benefits for an employee of a company upon retirement. RPPs are registered with the Canada Revenue Agency. The employee and employer, or just the employer make contributions to this retirement plan until the employee leaves the company or retires.

Registered Representative (RR)
A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive for clients trading investment products such as stocks, bonds and mutual funds. Also known as an "account executive".
It is also refers to a person registered with the Commodity Futures Trading Commission (CFTC) who works for a commission house or a futures commission merchant.

Registered Representative (RR)
A person who works for a brokerage company that is licensed by the Security and Exchange Commission (SEC) and acts as an account executive for clients trading investment products such as stocks, bonds and mutual funds. Also known as an "account executive".
It is also refers to a person registered with the Commodity Futures Trading Commission (CFTC) who works for a commission house or a futures commission merchant.

Registered Retirement Income Fund - RRIF
A retirement fund similar to an annuity contract that pays out income to a beneficiary or a number of beneficiaries. To fund their retirement, RRSP holders often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the beneficiary's normal income and are taxed as such by the Canadian Revenue Agency in the year that the beneficiary receives payouts. The organization or company that holds the RRIF is known as the carrier of the plan. Carriers can be insurance companies, banks or any kind of licensed financial intermediary. The Government of Canada is not the carrier for RRIFs it merely registers them for tax purposes.

Registered Retirement Savings Plan - RRSP
A legal trust registered with the Canada Revenue Agency and used to save for retirement. RRSP contributions are tax deductible and taxes are deferred until the money is withdrawn. An RRSP can contain stocks, bonds, mutual funds, GICs, contracts and even mortgage-backed equity.
RRSPs have two main tax advantages:
1) Contributors deduct contributions against their income. For example, if a contributor's tax rate is 40%, every $100 he or she invests in an RRSP will save that person $40 in taxes, up to his or her contribution limit.
2) The growth of RRSP investments is tax sheltered. Unlike with non-RRSP investments, returns are exempt from any capital-gains tax, dividend tax or income tax. This means that investments under RRSPs compound at a pretax rate.

Registered Retirement Savings Plan - RRSP
A legal trust registered with the Canada Revenue Agency and used to save for retirement. RRSP contributions are tax deductible and taxes are deferred until the money is withdrawn. An RRSP can contain stocks, bonds, mutual funds, GICs, contracts and even mortgage-backed equity.
RRSPs have two main tax advantages:
1) Contributors deduct contributions against their income. For example, if a contributor's tax rate is 40%, every $100 he or she invests in an RRSP will save that person $40 in taxes, up to his or her contribution limit.
2) The growth of RRSP investments is tax sheltered. Unlike with non-RRSP investments, returns are exempt from any capital-gains tax, dividend tax or income tax. This means that investments under RRSPs compound at a pretax rate.

Registered Retirement Savings Plan Contribution - RRSP Contribution
Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution room from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions.

Registered Retirement Savings Plan Deduction - RRSP Deduction
The amount that a Canadian taxpayer contributes to his or her RRSP. This amount can be deducted from the taxpayer's annual income to arrive at his or her taxable income for the year.

Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit
The maximum amount that the Canada Revenue Agency (CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liability. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be imposed on the coverage.

Registered Security
1. The name given to securities whereby ownership is registered with the issuing company or their agent.
2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue

Registrar
An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a share in a company you will be registered as a owner by one of these institutions.

Registration
1. The process by which a company files required documents with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information about its business during the registration process, including a business and asset description, a description of the security being offered and the details of that offering, a description and names of the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company.
2. The process by which securities brokers or dealers become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must become a member of a self-regulatory organization such as the NASD, be registered with the state or states in which he or she intends to sell securities if such state laws require him or her to do so, and finally, be or become a member of the Security Investor Protection Corporation.

Registered Retirement Savings Plan Contribution - RRSP Contribution
Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution room from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions

Registered Retirement Savings Plan Contribution - RRSP Contribution
Assets invested in an RRSP. RRSP contributions can be made at any time and for any amount up to an individual's contribution limit for the year. If a contributor does not make the maximum allowable contribution, the balance of unused contribution room from 1991 onwards is carried forward indefinitely. This allows people to make up for the years that they did not maximize their allowed RRSP contributions.

Registered Retirement Savings Plan Deduction - RRSP Deduction
The amount that a Canadian taxpayer contributes to his or her RRSP. This amount can be deducted from the taxpayer's annual income to arrive at his or her taxable income for the year.

Registered Retirement Savings Plan Deduction Limit - RRSP Deduction Limit
The maximum amount that the Canada Revenue Agency (CRA) allows a taxpayer to deduct from his or her personal income when calculating tax liability. The sum of contributions made to a taxpayer's personal RRSP and his or her spouse's or common-law partner's RRSP must be lower than the RRSP deduction limit or withholding taxes will be imposed on the coverage.

Registered Security
1. The name given to securities whereby ownership is registered with the issuing company or their agent.
2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue.

Registrar
An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a share in a company you will be registered as a owner by one of these institutions.

Registration
1. The process by which a company files required documents with the Securities and Exchange Commission detailing the particulars of a proposed public offering. A company issuing shares must reveal essential facts and detailed information about its business during the registration process, including a business and asset description, a description of the security being offered and the details of that offering, a description and names of the company's management, and the company's financial statements, which have been certified by an accountant working independently of the company.
2. The process by which securities brokers or dealers become legally entitled to sell securities. To have the authority to sell securities, a broker or dealer must file forms and be granted registration with the SEC, must already be a member, or must become a member of a self-regulatory organization such as the NASD, be registered with the state or states in which he or she intends to sell securities if such state laws require him or her to do so, and finally, be or become a member of the Security Investor Protection Corporation

Registered Security
1. The name given to securities whereby ownership is registered with the issuing company or their agent.
2. Securities that are unavailable for sale due to restrictions placed upon them at the time of issue

Registrar
An institution or organization that is responsible for keeping records of bondholders and shareholders. If you are the owner of a bond or a share in a company you will be registered as a owner by one of these institutions.

Registration Right
A contractual right giving investors holding restricted stock the ability to demand that the issuing company register the shares to the SEC, effectively making the stock available for sale to the public.

Regression
A statistical measure that attempts to determine the strength of the relationship between one dependent variable (usually denoted by Y) and a series of other changing variables (known as independent variables). The two basic types of regression are linear regression and multiple regression. Linear regression uses one independent variable to explain and/or predict the outcome of Y, while multiple regression uses two or more independent variables to predict the outcome. The general form of each type of regression is:
Linear Regression: Y = a + bX + u
Multiple Regression: Y = a + b

Regressive Tax
A tax that takes a larger percentage from the income of low-income people than the income of high-income people.

Regret Theory
A theory that says people anticipate regret if they make a wrong choice, and take this anticipation into consideration when making decisions. Fear of regret can play a large role in dissuading or motivating someone to do something.

Regular-Way Trade - RW
A type of trade that is settled through the regular settlement cycle required for the particular investment being traded. The settlement cycle is the time that the regulations of the securities market allows for the buyer to complete payment and for the seller to deliver the goods being purchased. The settlement cycle differs for different assets. Most trades are regular-way trades.

Regulation A - Reg A
An SEC regulation that governs offerings of $5,000,000 or less, which qualify for simplified registration (an exemption).

Regulation G
The Federal Reserve Board regulation that governs the extension of credit for securities transactions by commercial lenders and non-financial corporations.

Regulated Investment Company - RIC
A mutual fund or real estate investment trust that is eligible to pass the taxes on capital gains, dividends, or interest payments onto the clients or individual investors.

Regulation D - Reg D
A Securities and Exchange Commission (SEC) regulation governing private placement exemptions. Reg D allows usually smaller companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC.

Remittance
The process of sending money to remove an obligation. This is most often done through an electronic network, wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation.

Regulation Fair Disclosure - Reg FD
A rule passed by the Securities and Exchange Commission in an effort to prevent selective disclosure by public companies to market professionals and certain shareholders.
The Reg FD rule reads as follows: "Whenever an issuer, or any person acting on its behalf, discloses any material nonpublic information regarding that issuer or its securities to [certain enumerated persons], the issuer shall make public disclosure of that information... simultaneously, in the case of an intentional disclosure and... promptly, in the case of a non-intentional disclosure.

Regulation M
An IRS regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individual investors.

Regulation SHO
A regulatory addition by the Securities & Exchange Commission, expanding and updating the restrictions placed on short sale transactions. The updated regulations came into effect on Jan 3, 2005 and help to address several key issues in the short sale market.

Regulation T - Reg T
The Federal Reserve Board regulation that governs customer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities

Regulation U
The Federal Reserve Board regulation that governs loans by banks for the purchase of securities.

Rehypothecation
When a broker pledges hypothecated client owned securities in a margin account to secure a bank loan.

Reinsurance
The practice of insurers transferring portions of risk portfolios to other parties by some form of agreement in order to reduce the likelihood of having to pay a large obligation resulting from an insurance claim.
Also known as "insurance for insurers" or "stop-loss insurance".

Reinvestment
Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.
1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares.
2. In terms of mutual funds, it is the reinvestment of distributions and dividends to purchase additional units of that fund.
3. In terms of tax gain/loss harvesting, it is the realization of losses to offset a capital gains liability.
Reinvestment Rate
The rate at which cash flows from fixed-income securities may be reinvested.

Reinvestment Risk
The risk that future proceeds will have to be reinvested at a lower potential interest rate.

Related-Party Transaction
A business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a business transaction between a major shareholder and the corporation, such as a contract for the shareholder's company to perform renovations to the corporation's offices, would be deemed a related-party transaction.

Relative Price Strength (RS) Rating or Relative Strength
This IBD SmartSelect® Corporate Rating is a measure of a stock’s price performance over the last twelve months, compared to all stocks in our database.
The rating scale ranges from 1 (lowest) to 99 (highest).
Initial Public Offering (IPO) stocks will be assigned a "1" rating until the data from five trading sessions are available for calculation.

Regulation Q
A Federal Reserve Board regulation that limits the interest rate banks can pay on savings deposits.

Relative Purchase Power Parity
An expansion of the purchase power parity theory suggesting that prices in countries vary for the same product but that they differ by the same proportional rate over time. The reasons suggested for this price difference include taxes, shipping costs and differences in product quality.

Relative Return
The return that an asset achieves over a period of time compared to a benchmark. The relative return is the difference between the absolute return achieved by the asset and the return achieved by the benchmark.

Relative Strength
A measure of price trend that indicates how a stock is performing relative to other stocks in its industry

Relative Strength (RS) Line
A stock's Relative Strength line compares a stock's price performance versus the S&P 500 index. Many charting services plot a RS Line along with the stock's price, moving averages, etc. The line is derived by dividing the stock price by the S&P 500 Index value. An upward sloping line means that the stock's price is outperforming the S&P 500 Index.

Relative Strength Index - RSI
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula:

Relevant Cost
A managerial accounting term that is used to describe costs that are specific to management's decisions. The concept of relevant costs eliminates unnecessary data that could complicate the decision-making process

Repudiation
When one party refuses to honor their terms in a loan contract.

Research And Development - R&D
A company's activities that are directed at developing new products or procedures.

Reload Option
An employee stock option that grants additional options upon exercise of the original.

Reloading
A term lenders commonly use to refer to the habits of borrowers taking out loans to repay the balance on other loans. Often reloading is done to take advantage of lower interest rates offered by other loans, and potential tax benefits.

Remainder Man
The person who receives the principal remaining in a trust account after all other required payments have been made, such as those to the beneficiary and expenses.

Remittance
The process of sending money to remove an obligation. This is most often done through an electronic network, wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation.

Remuneration
Payment or compensation received for services or employment. This includes the base salary and any bonuses or other economic benefits that an employee or executive receives during employment.

Renko Chart
A type of chart, developed by the Japanese, that is only concerned with price movement time and volume are not included. It is thought to be named for the Japanese word for bricks, "renga". A renko chart is constructed by placing a brick in the next column once the price surpasses the top or bottom of the previous brick by a predefined amount. White bricks are used when the direction of the trend is up, while black bricks are used when the trend is down. This type of chart is very effective for traders to identify key support/resistance levels. Transaction signals are generated when the direction of the trend changes and the bricks alternate colors.

Renounceable Right
An offer issued by a corporation to shareholders to purchase more shares of the corporation's stock (usually at a discount). Renounceable rights have a value and can be traded

Rent-Seeking
When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

Reorganization
A process designed to revive a financially troubled or bankrupt firm. A reorganization involves the restatement of assets and liabilities, as well as holding talks with creditors in order to make arrangements for maintaining repayments

Repatriation
The process of converting a foreign currency into the currency of one's own country. The amount that the investor will receive depends on the exchange rate between the two currencies being traded at the settlement time.

Replacement Cost
The price that will have to be paid to replace an existing asset with a similar asset.

Reporting Currency
The currency used in published reports and financial documents.
Reporting Level
A level of ownership of a specific futures position wherein the holders exceed the stated amounts and are required by the CFTC to submit daily reports.
Also known as reporting limit.

Repurchase Agreement - Repo
A form of short-term borrowing for dealers in government securities. The dealer sells the government securities to investors, usually on an overnight basis, and buys them back the following day.
For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the transaction, (buying the security and agreeing to sell in the future) it is a reverse repurchase agreement.

Required Beginning Date - RBD
The date by which a qualified plan participant or IRA owner must begin receiving required minimum distributions from his or her retirement account.

Required Minimum Distribution - RMD
The amount that Traditional, SEP and SIMPLE IRA owners and qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70.5. RMD amounts must then be distributed each subsequent year.

Required Rate Of Return
The rate of return needed to induce investors or companies to invest in something.

Required Yield
The return a bond must offer in order to be a worthwhile investment. Required yield is set by the market and sets the precedent for how current bond issues will be priced.

Rescission
The right of an individual involved within a contract to return to the identical state as before they entered into the agreement, due to courts not recognizing the contract as legally binding

Reserve Currency
A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate.
Reserve Fund
An account set aside by an individual or business to meet any unexpected costs that may arise in the future as well as the future costs of upkeep. In most cases, the fund is simply a savings account or another highly liquid asset, as it is impossible to predict when an unexpected cost may arise. However, if the fund is set up to meet the costs of scheduled upgrades, less liquid assets may be used.

Reserve Ratio
The portion (expressed as a percent) of depositors' balances banks must have on hand as cash. This is a requirement determined by the country's central bank, which in the U.S. is the Federal Reserve. The reserve ratio affects the money supply in a country. This is also referred to as the "cash reserve ratio" (CRR).

Reserve Requirements
Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank.

Resident Alien
A foreigner who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the U.S., you need to either currently have a green card or have had one in the last calendar year. You also fall under the U.S. classification of resident alien if you have been in the U.S. for more than 31 days during the current year along with having been in the U.S. for at least 183 days over a three-year period that includes the current year

Residential Mortgage-Backed Security - RMBS
A type of security whose cash flows come from residential debt such as mortgages, home-equity loans and subprime mortgages. This is a type of mortgage-backed securities that focuses on residential instead of commercial debt.

Residual Interest
A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC).

Residual Security
Another way to describe convertibles.

Resistance
In technical analysis, a price level at which a stock has a tendency to stay below. When a stock moves above such a level on high volume, it is sometimes viewed as a bullish indication.

Resistance (Resistance Level)
The price at which a stock or market can trade, but which it cannot exceed, for a certain period of time.
Often referred to as "resistance level".

Respite Care
Short-term or temporary care of a few hours or weeks of the sick or disabled to provide relief, or respite, to the regular caregiver, usually a family member.

Restatement
A revision in a company's earlier financial statements.

Restricted Stock
Insider holdings that are under some other kind of sales restriction. Restricted stock must be traded in compliance with special SEC regulations

Restructuring
A significant modification made to the debt, operations or structure of a company. This type of corporate action is usually made when there are significant problems in a company, which are causing some form of financial harm and putting the overall business in jeopardy. The hope is that through restructuring, a company can eliminate financial harm and improve the business

Retail Banking
Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth.

Retail Investor
Individual investors who buy and sell securities for their personal account, and not for another company or organization.
Also known as an "individual investor" or "small investor".

Retail Note
A medium-term, subordinated, unsecured debt obligation usually issued by a multinational corporation. Retail notes can be purchased directly from the issuer at par in $1,000 increments with no accrued interest or added markups. They will usually pay a fixed interest rate for nine months or more (after that, the rate may vary). Retail notes may be callable and can be redeemed at the option of the issuer or holder. Most retail notes also feature a survivor's option.
Also known as "retail bonds".

Retail Price Index - RPI
An index that gathers the prices of several retail goods in outlets across the United States in order to give an indication of the rate of inflation.

Retained Earnings
The percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders' equity on the balance sheet.
Calculated by adding net income to (or subtracting any net losses from) beginning retained earnings and subtracting any dividends paid to shareholders:
Also known as the "retention ratio" or "retained surplus".

Retender
The act of an investor selling the delivery note issued by a clearing house upon tender by the counter-party of the futures contract.

Retention Ratio
The percent of earnings credited to retained earnings. In other words, the proportion of net income that is not paid out as dividends.

Retired Securities
Securities that have been repurchased by the issuer out of the company's retained earnings and cancelled according to Securities & Exchange Commission (SEC) regulations. They have no market value and no longer represent a share of ownership in the issuing corporation.

Retirement of Securities
1. The cancellation of stocks or bonds because the issuer has bought them back.
2. The removal of an asset from securities markets because its maturity date has been reached.

Retracement
A reversal in the movement of a stock's price, countering the prevailing trend.

Retractable Bond
A bond that features an option for the holder to force the issuer to redeem the bond before maturity at par value. An investor may choose to shorten the maturity on a bond because of market conditions or if he or she requires the principal sooner than expected.

Retrocession
1. The practice of one reinsurance company essentially insuring another reinsurance company by accepting business that the other company had agreed to underwrite.
2. The voluntary act of returning ceded property from one group to another. Retrocession can also be the result of a request to have property returned but, by definition, is not the result of a forced transaction.
3. The process of differentiating or diversifying assets by consolidating and then subdividing them amongst a number of stakeholders.