| Term | Definition |
|---|---|
| R-Squared | A statistical measure of how well a regression line fits the data |
| Rabbi Trust | A type of trust used for executive compensation |
| Race to the Bottom | A situation where countries compete to lower standards |
| Racketeering | Organized crime |
| Rally | A period of rising prices |
| Ramp Up | To increase production |
| Random Variables | Variables whose values are random |
| Random Walk Theory | The theory that stock prices move randomly |
| Range | The difference between the highest and lowest values |
| Ratchet Effect | The phenomenon where progress is difficult to reverse |
| Rate-and-Term Refinance | A type of mortgage refinance |
| Rate of Change (ROC) | A technical indicator |
| Rate of Return | The gain or loss on an investment |
| Rating | An assessment of creditworthiness |
| Ratio Analysis | The use of ratios to analyze financial statements |
| Rational Behavior | Behavior that is consistent with one’s goals |
| Rational Choice Theory | The theory that individuals make rational choices |
| Rational Expectations Theory | The theory that individuals form expectations based on all available information |
| Rationalization | Justifying unethical behavior |
| Rationing | Limiting the availability of goods or services |
| Raw Materials | Materials used in production |
| Reaganomics | The economic policies of Ronald Reagan |
| Real Asset | A tangible asset |
| Real Economic Growth Rate | The economic growth rate adjusted for inflation |
| Real Effective Exchange Rate (REER) | An exchange rate adjusted for inflation |
| Real Estate | Land and buildings |
| Real Estate Agent | A person who helps buy and sell real estate |
| Real Estate Investment Group | A group of investors who pool their money to invest in real estate |
| Real Estate Investment Trust (REIT) | A company that owns and operates income-producing real estate |
| Real Estate Limited Partnership (RELP) | A type of partnership used to invest in real estate |
| Real Estate Mortgage Investment Conduit (REMIC) | A type of investment vehicle that holds mortgages |
| Real Estate Operating Company (REOC) | A company that owns and operates real estate |
| Real Estate Owned (REO) | Real estate owned by a lender as a result of foreclosure |
| Real Estate Settlement Procedures Act (RESPA) | A U.S. law related to real estate closings |
| Real Estate Short Sale | A sale of real estate for less than the amount owed on the mortgage |
| Real Gross Domestic Product (GDP) | GDP adjusted for inflation |
| Real Income | Income adjusted for inflation |
| Real Interest Rate | The interest rate adjusted for inflation |
| Real Option | The right to make a future investment |
| Real Property | Real estate |
| Real Rate of Return | The rate of return adjusted for inflation |
| Real Time | Occurring immediately |
| Real-Time Gross Settlement (RTGS) | A payment system that settles transactions immediately |
| Real-Time Quote (RTQ) | A quote for a security that is updated in real time |
| Realization Multiple | A measure of the return on a private equity investment |
| Realized Gain | A gain that has been realized from the sale of an asset |
| Realized Loss | A loss that has been realized from the sale of an asset |
| Realized Yield | The actual return earned on a bond |
| Realtor | A real estate agent who is a member of the National Association of Realtors |
| Rebalancing | The process of adjusting a portfolio to maintain its target asset allocation |
| Rebate | A refund |
| Recapitalization | Restructuring a company’s capital structure |
| Receipt | A written record of a transaction |
| Receivable | Money owed to a company |
| Receivables Turnover Ratio | A measure of how quickly a company collects its receivables |
| Receivership | A situation where a receiver is appointed to manage a business |
| Recency, Frequency, Monetary Value (RFM) | A marketing technique |
| Recession | A period of economic decline |
| Recessionary Gap | The difference between actual and potential GDP |
| Recharacterization | A change in the tax treatment of a transaction |
| Reconciliation | The process of comparing two sets of records |
| Record Date | The date on which a shareholder must be registered to receive a dividend |
| Recourse | The right of a lender to pursue assets beyond the collateral |
| Recourse Loan | A loan where the lender has recourse |
| Recovery Rate | The percentage of a loan that is recovered in a default |
| Recurring Billing | Billing customers on a regular basis |
| Recurring Revenue | Revenue that is generated on a regular basis |
| Red Herring Filing | A preliminary prospectus |
| Redemption | The repayment of a bond or preferred stock |
| Redlining | The practice of denying services to certain areas |
| Reference Number | A number used to identify a transaction |
| Reference Rate | A benchmark interest rate |
| Refinance | To obtain a new loan to replace an existing loan |
| Reflexivity | The idea that market participants’ beliefs can influence prices |
| Registered Education Savings Plan | A savings plan for education expenses |
| Registered Investment Advisor (RIA) | A financial advisor who is registered with the SEC or a state regulator |
| Registered Representative (RR) | A person who sells securities |
| Regression | A statistical technique |
| Regressive Tax | A tax where the tax rate decreases as income increases |
| Regret Theory | A theory about decision-making |
| Regtech | Technology used to comply with regulations |
| Regulated Investment Company (RIC) | A type of investment company |
| Regulation A | A regulation that allows companies to raise capital from the public |
| Regulation B | A regulation related to equal credit opportunity |
| Regulation CC | A regulation related to check clearing |
| Regulation D | A regulation related to private placements |
| Regulation DD | A regulation related to truth in savings |
| Regulation E | A regulation related to electronic fund transfers |
| Regulation O | A regulation related to insider lending |
| Regulation SHO | A regulation related to short selling |
| Regulation T | A regulation related to margin requirements |
| Regulation U | A regulation related to bank lending for securities purchases |
| Regulation W | A regulation related to transactions between banks and their affiliates |
| Regulation Z | A regulation related to truth in lending |
| Regulatory Capture | A situation where regulators are influenced by the industry they regulate |
| Regulatory Risk | The risk of changes in regulations |
| Rehypothecation | The practice of re-using collateral |
| Reimbursement | A repayment |
| Reinsurance | Insurance for insurance companies |
| Reinsurance Ceded | Reinsurance purchased by an insurance company |
| Reinvestment | Reinvesting earnings |
| Reinvestment Rate | The rate at which earnings can be reinvested |
| Reinvestment Risk | The risk that earnings cannot be reinvested at the same rate |
| Related-Party Transactions | Transactions between related parties |
| Relationship Management | The process of building relationships with customers |
| Relationship Manager | A person who manages relationships with customers |
| Relative Purchasing Power Parity (RPPP) | A theory about exchange rates |
| Relative Strength | A technical indicator |
| Relative Strength Index (RSI) | A technical indicator |
| Relative Valuation Model | A valuation model that compares a company to its peers |
| Relative Value | The value of an asset relative to another asset |
| Relative Vigor Index (RVI) | A technical indicator |
| Relevant Cost | A cost that is relevant to a decision |
| Relief Rally | A temporary increase in stock prices |
| Remittance | A transfer of money |
| Remuneration | Payment for services |
| Renewable Energy Certificate (REC) | A certificate representing the environmental benefits of renewable energy |
| Renewable Resource | A resource that can be replenished |
| Renko Chart | A type of chart used in technical analysis |
| Rent Control | Government restrictions on rent increases |
| Rent Seeking | The pursuit of economic gain through political means |
| Renter’s Insurance | Insurance that covers a renter’s belongings |
| Reorganization | Restructuring a company |
| Repackaging | Combining different securities into a new security |
| Repatriable | Able to be repatriated |
| Repatriation | The process of bringing money back to one’s home country |
| Repayment | Paying back a debt |
| Replacement Cost | The cost of replacing an asset |
| Replacement Rate | The rate at which a population needs to replace itself |
| Representative Sample | A sample that accurately reflects the population |
| Repudiation | The rejection of a contract |
| Repurchase Agreement (Repo) | A short-term loan secured by securities |
| Reputational Risk | The risk of damage to one’s reputation |
| Request for Quote (RFQ) | A request for a price quote |
| Requests for Proposal (RFP) | A request for proposals |
| Required Minimum Distribution (RMD) | The minimum amount that must be withdrawn from a retirement account |
| Required Rate of Return (RRR) | The minimum return an investor expects to receive |
| Requisition | A request for goods or services |
| Research Analysts | Individuals who analyze companies and securities |
| Research and Development (R&D) | Activities aimed at developing new products or processes |
| Term | Definition |
|---|---|
| Research and Development (R&D) Expenses | Expenses incurred on research and development activities |
| Research Associate | A person who assists with research |
| Research Report | A report on a company or security |
| Reserve Bank of India (RBI) | The central bank of India |
| Reserve Currency | A currency held by central banks as part of their foreign exchange reserves |
| Reserve Fund | A fund held to cover unexpected expenses |
| Reserve Price | The minimum price at which an asset will be sold at auction |
| Reserve Ratio | The percentage of deposits that banks are required to hold in reserve |
| Reserve Requirements | Same as Reserve Ratio |
| Resident Alien | A foreign national who is a resident of the country |
| Residential Mortgage-Backed Security (RMBS) | A security backed by a pool of residential mortgages |
| Residual Dividend | A dividend policy where dividends are paid out of leftover earnings |
| Residual Income | Income left over after meeting required expenses |
| Residual Standard Deviation | A measure of the variability of the residuals in a regression |
| Residual Sum of Squares (RSS) | The sum of the squared residuals in a regression |
| Residual Value | The value of an asset at the end of its useful life |
| Resistance (Resistance Level) | A price level at which a security is likely to encounter resistance |
| Resolution Trust Corporation (RTC) | A former U.S. government agency that resolved failed savings and loan associations |
| Resource Curse | The phenomenon where countries with abundant natural resources experience slower economic growth |
| Restatement | A correction of previously issued financial statements |
| Restricted Cash | Cash that is restricted for a specific purpose |
| Restricted Stock | Stock that cannot be sold for a certain period of time |
| Restricted Stock Unit (RSU) | A type of stock-based compensation |
| Restrictive Covenant | A limitation on the use of property or a business |
| Restructuring | A significant change in a company’s operations or finances |
| Restructuring Charge | A one-time expense associated with restructuring |
| Resume | A summary of one’s education and work experience |
| Retail Banking | Banking services for individuals |
| Retail Investor | An individual investor |
| Retail Price Index (RPI) | A measure of consumer inflation in the UK |
| Retail Sales | Sales of goods to consumers |
| Retained Earnings | Earnings that are not distributed as dividends |
| Retainer Fee | A fee paid to secure services |
| Retention Bonus | A bonus paid to retain employees |
| Retention Ratio | The percentage of earnings retained by a company |
| Retirement Income Certified Professional (RICP) | A professional designation for financial advisors specializing in retirement planning |
| Retirement Money Market Account | A money market account designed for retirement savings |
| Retirement Planning | The process of planning for retirement |
| Retracement | A temporary reversal in a stock price trend |
| Retrocession | Reinsurance of reinsurance |
| Return | The gain or loss on an investment |
| Return of Capital (ROC) | A return of the original investment |
| Return on Assets (ROA) | A measure of profitability |
| Return on Average Assets (ROAA) | Same as ROA but using average assets |
| Return on Average Capital Employed (ROACE) | A measure of profitability |
| Return on Average Equity (ROAE) | Same as ROE but using average equity |
| Return on Capital Employed (ROCE) | A measure of profitability |
| Return on Equity (ROE) | A measure of profitability |
| Return on Invested Capital (ROIC) | A measure of profitability |
| Return on Investment (ROI) | A measure of profitability |
| Return on Net Assets (RONA) | A measure of profitability |
| Return on Revenue (ROR) | A measure of profitability |
| Return on Risk-Adjusted Capital (RORAC) | A measure of profitability adjusted for risk |
| Return on Sales (ROS) | A measure of profitability |
| Return on Total Assets (ROTA) | Same as ROA |
| Returned Payment Fee | A fee charged for a returned payment |
| Revaluation | An increase in the value of an asset |
| Revaluation Reserve | A reserve created from the revaluation of assets |
| Revealed Preference | The idea that people’s preferences can be inferred from their choices |
| Revenue | Income from sales |
| Revenue Agent’s Report (RAR) | A report by the IRS |
| Revenue Bond | A bond that is repaid from the revenue generated by a project |
| Revenue Cap Regulations | Regulations that limit the amount of revenue a company can earn |
| Revenue Deficit | A situation where government revenue is less than spending |
| Revenue Generating Unit (RGU) | A part of a business that generates revenue |
| Revenue Officer | An IRS employee who collects taxes |
| Revenue Passenger Mile (RPM) | A measure of airline traffic |
| Revenue per Available Room (RevPAR) | A measure of hotel revenue |
| Revenue per Available Seat Mile (RASM) | A measure of airline revenue |
| Revenue per Employee | A measure of a company’s productivity |
| Revenue per User (RPU) | A measure of a company’s revenue per user |
| Revenue Recognition | The accounting principle that governs when revenue is recognized |
| Reversal | A change in trend |
| Reverse Auction | An auction where the lowest bidder wins |
| Reverse Culture Shock | The difficulty of readjusting to one’s own culture after living abroad |
| Reverse ICO | An initial coin offering for an existing company |
| Reverse Morris Trust | A tax-free spin-off and merger |
| Reverse Repurchase Agreement | A transaction where securities are sold with an agreement to repurchase them |
| Reverse Stock Split | A decrease in the number of outstanding shares |
| Reverse Takeover (RTO) | A way for a private company to go public |
| Reverse Triangular Mergers | A type of merger |
| Revocable Beneficiary | A beneficiary that can be changed |
| Revocable Trust | A trust that can be changed |
| Revolver | A type of credit facility |
| Revolving Credit | Credit that can be used repeatedly |
| Revolving Door | The movement of individuals between government and industry |
| Revolving Loan Facility | A type of credit facility |
| Rho | A measure of the sensitivity of an option’s price to changes in interest rates |
| Ricardian Equivalence | The theory that government borrowing does not affect consumption |
| Rider | An addition to a contract |
| Right of First Offer | The right to make the first offer |
| Right of First Refusal | The right to match an offer |
| Right of Rescission | The right to cancel a contract |
| Right-to-Work Law | A law that prohibits closed shops |
| Rights Offering (Issue) | An offer to existing shareholders to buy additional shares |
| Ring-Fence | To protect assets from creditors |
| Ripple | A cryptocurrency platform |
| Ripple (Cryptocurrency) | A cryptocurrency |
| Risk | The possibility of loss |
| Risk-Adjusted Return | A measure of return that takes into account risk |
| Risk-Adjusted Return On Capital (RAROC) | A measure of return adjusted for risk and capital |
| Risk Analysis | The process of identifying and assessing risks |
| Risk Assessment | Same as Risk Analysis |
| Risk-Averse | Having a low tolerance for risk |
| Risk-Based Capital Requirement | A requirement that banks hold a certain amount of capital based on their risk |
| Risk Control | The process of managing risks |
| Risk-Free Asset | An asset with no risk |
| Risk-Free Rate Of Return | The return on a risk-free asset |
| Risk Management | The process of identifying, assessing, and managing risks |
| Risk Measures | Ways of quantifying risk |
| Risk Neutral | Indifferent to risk |
| Risk-Neutral Measures | Probabilities used in option pricing |
| Risk-Neutral Probabilities | Same as Risk-Neutral Measures |
| Risk-On Risk-Off | A market sentiment indicator |
| Risk Parity | A portfolio management strategy that allocates assets based on risk |
| Risk Premium | The additional return investors expect for taking on risk |
| Risk Profiles | A description of an individual’s risk tolerance |
| Risk-Return Tradeoff | The principle that higher returns come with higher risk |
| Risk Reversal | An options strategy |
| Risk/Reward Ratio | The ratio of potential loss to potential gain |
| Risk Tolerance | The amount of risk an individual is willing to accept |
| Risk-Weighted Assets | Assets weighted according to their risk |
| Rival Good | A good that can only be consumed by one person at a time |
| Roadshow | A series of presentations to potential investors |
| Robber Baron | A wealthy businessman in the late 19th century |
| Robinson-Patman Act | A U.S. law that prohibits price discrimination |
| Robo Advisor | An automated investment advisor |
| Robotic Process Automation (RPA) | The use of software robots to automate tasks |
| Robust | Able to withstand changes |
| Rogue Trader | A trader who engages in unauthorized trading |
| Roll Back | To reverse a policy |
| Roll-Down Return | The return from the convergence of a bond’s yield to its par value |
| Term | Definition |
|---|---|
| Roll Forward | To extend the maturity of a futures contract |
| Roll Yield | The return from rolling over a futures contract |
| Rolling Returns | Returns calculated over a specific period |
| Rollover | The process of extending the maturity of a futures contract |
| Rollover Risk | The risk that a loan cannot be refinanced |
| Roth 401(k) | A type of retirement plan |
| Roth IRA | A type of retirement account |
| Round Lot | A standard unit of trading |
| Routing Transit Number (RTN) | A bank identifier |
| Roy’s Safety-First Criterion (SFRatio) | A measure of risk-adjusted return |
| Royalty | A payment for the use of intellectual property |
| Rule 10b-5 | A SEC rule related to insider trading |
| Rule 10b-18 | A SEC rule related to share repurchases |
| Rule 10b5-1 | A SEC rule related to insider trading plans |
| Rule 144 | A SEC rule related to the sale of restricted securities |
| Rule 144A | A SEC rule related to the sale of restricted securities to qualified institutional buyers |
| Rule of 70 | A rule of thumb for estimating how long it takes for an investment to double |
| Rule of 72 | A rule of thumb for estimating how long it takes for an investment to double, taking into account compounding |
| Rule 72(t) | An IRS rule related to early withdrawals from retirement accounts |
| Rule of 78 | A method of calculating interest on a loan |
| Rule of Thumb | A general guideline |
| Run Rate | The current rate of performance |
| Runoff Insurance | Insurance that covers the runoff of a portfolio |
| Russell 1000 Index | A stock market index of large-cap companies |
| Russell 2000 Index | A stock market index of small-cap companies |
| Russell 3000 Index | A stock market index of the largest 3000 U.S.-traded companies |