R-squared, usually represented as R2, is a technique that evaluates the statistical relationship between two series of events. It is commonly used to describe the portion of a security's movement

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A rabbi trust is a type of deferred compensation plan that lets employers transfer money into a trust for executives.

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When most people think of racketeering, thoughts of 1930s mobsters come to mind. Gangs of this time period are often associated with organized crime and operating “rackets” to illicitly earn and m

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In the finance world, raider is short for corporate raider, which is a person or entity that purchases a company for the sole purpose of selling off its assets.

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A rain check is a written promise from a seller to a buyer. It guarantees that a buyer can purchase a product for a certain price at a later date, usually because the item is out of stock.

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A rainbow option is an option linked to two or more underlying assets.

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A rally is a period of hours, days, weeks, months, or sometimes years during which securities prices consistently rise.  

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A ramp up is an increase in the amount of products or services a company sells, usually by expansion into new markets or geographic regions.

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The random walk theory states that market and securities prices are random and not influenced by past events. The idea is also referred to as the "weak form efficient-market hypothesis." 

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A rate and term refinance occurs when a borrower replaces one mortgage with another mortgage that has a different maturity and interest rate.

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Rate of Change (ROC), is the percentage change in price over a specified time frame. It is one of the most basic ways to measure momentum.

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A rate of return is measure of profit as a percentage of investment.

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A rate trigger is a change in interest rates that prompts a bond issuer to call its bonds.  

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In personal finance, the term rating commonly refers to a credit rating score issued by the Fair Isaac Corporation (a "FICO score"). A person's credit rating indicates how creditworthy he

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Ratings Service is provided by companies that evaluate the risks associated with debt securities. 

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Ratio analysis is the exercise of calculating various pieces of financial data in relation to one another.

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Raw materials are commodities, parts or substances that are assembled or processed to form a final product.  

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A re-offer price is the price at which an underwriter offers a security to the general public.

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Reaffirmation occurs when a lender agrees to forgive a borrower's debt and then the borrower agrees to repay the debt anyway.

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Reaganomics is a reference to U.S. president Ronald Reagan's economic policies between 1981 and 1989.

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A real asset is a tangible, touchable asset that has value.

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Real estate refers to land, as well as any physical property or improvements affixed to the land, including houses, buildings, landscaping, fencing, wells, etc.

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A real estate agent, working on behalf of a licensed real estate broker, is a licensed professional who works on behalf of the buyer and seller of real estate during a sales transaction.

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A real estate investment trust (REIT) is a closed-end investment company that owns assets related to real estate such as buildings, land and real estate securities. REITs sell on the major stock mark

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Real estate owned (REO) is a term describing real estate owned by lenders, usually because the lender has foreclosed on the property.

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The Real Estate Settlement Procedures Act, abbreviated as RESPA, is a federal ordinance that was established by the U.S. Department of Housing and Urban Development (HUD). It is currently supervised b

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A real estate short sale is the sale of property that is worth less than what is owed on it.

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Real gross domestic product, or real GDP, is a measure of the value of all goods and services produced by an economy in a period. Because the value is adjusted for inflation it can separate out the ef

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Real income is inflation-adjusted income or wages.

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A real interest rate is an inflation-adjusted interest rate.

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Real property is anything that is attached to land.

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A real rate of return is a return on an investment that is adjusted for inflation, taxes or other external factors.

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A real-time quote is a stock quote that feeds directly from the exchange and does not have a time delay.  

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Realized gains are increases in the value of an asset that has been sold. This concept is the opposite of paper profit -- a paper profit only turns into a realized gain when you actually sell the secu

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A realized loss is a decrease in the value of an asset that has been sold. This concept is the opposite of paper loss or unrealized loss -- a paper loss only turns into a realized loss when you actual

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A realtor is a professional designation for a real estate broker who has membership in the National Association of Realtors (or NAR).

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Rebalancing is the adjustment to an investment portfolio that realigns the investor's holdings with their targeted allocation of assets.

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In stock trading, a rebate occurs when a short seller has taken a short position in a stock that then pays a dividend before the settlement date. The rebate is the dividend that the short seller is re

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A recapture occurs when a person or entity takes back an asset from a buyer under certain conditions.

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A recapture clause is language in a contract that allows a person or entity to take back an asset under certain conditions.

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The term receivables is short for accounts receivable (A/R), which are amounts bought by customers for a company's goods and services.

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The receivables turnover ratio is a company's sales made on credit as a percentage of average accounts receivable. The formula for receivables turnover ratio is: Receivables Turnover = Net Cr

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Receivership is a form of bankruptcy in which a court-appointed trustee reorganizes the bankrupt entity.  

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A recession is two consecutive quarters of declining gross domestic product (GDP)

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A stock or other investment is recession resistant when it tends to rise in value when the economy falters (and the markets falter with it). Recession-resistant investments are usually countercyclical

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A recession-proof investment does well or at least remains stable during economic contractions.

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The record date is the date used to determine the holders of a security who are entitled to receive a dividend or distribution.

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A record high is the highest price a security achieves in a given time period.

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A record low is the lowest price a security achieves in a given time period.  

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A recording fee is the cost of making a public record of a real estate transaction.

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A rectangle formation describes a price pattern where supply and demand are in approximate balance for an extended period of time. In such a scenario, the shares tend to move in a narrow range, hittin

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Recurring revenue is revenue that a company has reasonable assurance will occur at regular intervals in the future.  

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A red herring is a registration statement filed with the Securities and Exchange Commission (SEC) by a company that intends to make a public equity offering. The red herring is a rough draft of the co

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A redundant asset is an asset that generates income, but is not linked to the fundamental operations of the company.

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A reference rate is an interest rate that determines another interest rate.

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Refinance refers to the replacement of a debt with new debt bearing different terms.

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Refund can refer to the amount that the Internal Revenue Service will pay to a taxpayer based an overpayment of estimated tax or employer withholding taxes during the year. A refund also refers t

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Refunding protection is bond provision that keeps an issuer from using cheaper debt to redeem a bond issue before it matures.

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A Registered Investment Advisor (RIA) is an investment manager who is registered with the Securities Exchange Commission (SEC) and who must comply with SEC regulations.

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A registered principal is a person in a management position in the investment banking or securities business.

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Regression is a statistical method used in finance and other fields to make predictions based on observed values. It is a measure of how correlated a group of actual observations are to a model’

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A regressive tax is a tax that increases as a percentage of income as the amount of income declines.

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Regulation Fair Disclosure (Reg FD) requires all publicly traded companies to disclose material information to all investors simultaneously.

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Regulatory data is information that must be provided by a company to a regulatory agency. 

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Reinvestment rate is the rate at which an investor can reinvest cash flows from an investment.

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Reinvestment risk is the chance that an investor will not be able to reinvest cash flows from an investment at a rate equal to the investment's current rate of return.

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Also called price persistence, relative strength is the tendency of a security's price to follow the trend of an index like the S&P 500. It is a measure of momentum.

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The Relative Strength Index (RSI) was first developed by renowned technical analyst J. Welles Wilder. It is not to be confused with relative strength, which compares a stock's price performance to tha

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The relative strength line compares a stock's price performance against that of the overall market, usually as measured by the S&P 500. However, if the trader desires, the comparison can be ma

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Also called systematic risk or non-diversifiable risk, relevant risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.  Diversifiable risk is the

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The term remote deposit capture (RDC) refers to a technology that uses a smartphone to make online deposits to a user's bank account without having to physically visit a branch location.

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Reorganization may refer to the rehabilitation of a company's finances pursuant to a bankruptcy. It can also refer to any process that affects the tax structure of a corporation. In addition, reor

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Repayment usually refers to the payments on a debt. 

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A repurchase agreement is the sale of a security combined with an agreement to repurchase the same security at a higher price at a future date.  It is also referred to as a "repo." 

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Rescission is the cancelling of a contract so that it is no longer legally binding. A court can release parties from any obligations under the contract and revert them to their positions before the co

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Research and development (R&D) aims to create new technology or information that can improve the effectiveness of products or make the production of products more efficient.

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The reserve ratio is the percentage of deposits that the Federal Reserve requires a bank to keep on hand at a Federal Reserve Bank.

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A reserve report is filed by companies in the oil and gas industry. It estimates remaining quantities of oil and gas (reserves) expected to be recovered from existing properties.

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Reserve requirements are Federal Reserve rules that require banks and other financial institutions to keep a strict percentage of their deposits on reserve at a Federal Reserve bank. The Federal Reser

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Also called the abnormal earnings valuation model, the residual income model is a method for predicting stock prices.

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In technical trading analysis, resistance is an upper limit in a price channel in which a security’s price tends to stay.

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A restricted card list is a list of credit cards that are reported stolen, canceled or compromised in some way.

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Restricted stock is stock that the owner cannot sell immediately or under certain conditions.

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A restrictive covenant is a promise a company makes to not exceed certain financial ratios or not conduct certain activities, usually in return for a loan or bond issue.    

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Restructure, or restructuring, refers to the management process of reorganizing a company to make it more profitable. 

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Retail banking refers to the consumer-oriented services offered by commercial banks. These services include checking and savings accounts, mortgages and various types of loans and investment services

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A retail investor is an individual who purchases securities for his or her own personal account rather than for an organization. Retail investors typically trade in much smaller amounts than instituti

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Retained capital is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, earned surplus, or accumulated earnings.

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Retained earnings are the sum of a company's profits, after dividend payments, since the company's inception. They are also called earned surplus, retained capital, or accumulated earnings.

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A retracement is a temporary reversal in the movement of a stock's price. 

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Return of capital (ROC) is a payment from a security to an investor from funds that were not derived from net income.

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Return on assets (ROA) is a financial ratio that can help you analyze the profitability of a company. ROA measures the amount of profit a company generates as a percentage relative to its total assets

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Return on capital is a profitability ratio. It measures the return that an investment generates for capital contributors, i.e. bondholders and stockholders. Return on capital indicates how effective a

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Also referred to as “return on net assets”, return on equity (ROE) is a measurement of how effectively a business uses equity – or the money contributed by its stockholders and cumulative retain

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Return on invested capital (ROIC) is a profitability ratio. It measures the return that an investment generates for those who have provided capital, i.e. bondholders and stockholders.  ROIC tells

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Return on net assets is a metric which measures a company's financial performance with regard to fixed assets combined with working capital.

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Return on total capital is a profitability ratio. It is a measure of the return an investment generates for those who contribute capital, i.e. bondholders and stockholders.  Return on total capit

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Revaluation refers to the adjustment of the exchange rate of a country's currency.

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Revenue, also called sales (or turnover, in the UK), refers to the value of the products and services a company sells. Net revenue usually refers to a company's sales net of discounts and returns.

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Revenue bonds are municipal bonds that are issued to fund specific projects that generate their own revenue.

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Revenue per available room, or RevPAR for short, is a ratio commonly used to measure financial performance in the hospitality industry. The metric, which is a function of both room rates and occupancy

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Revenue per employee measures the average revenue generated by each employee of a company. 

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A reverse mortgage is an arrangement whereby a homeowner borrows against his or her home equity and receives regular payments from the lender until the total payments reach a predetermined limit.

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A reverse split is a consolidation of a corporation's shares according to a predetermined ratio.

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A reverse takeover is the purchase of a publicly-traded company by a smaller private company.

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A reverse triangular merger is a merger in which the acquisition is carried out by a subsidiary of the acquiring company.

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A revocable trust is a trust with provisions that can be altered by the grantor. Sometimes a revocable trust is referred to as a "living revocable trust."

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Revolving credit is a line of credit individuals and corporations can borrow from and pay back as needed.

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Right of first refusal grants the terms of a transaction to one party to determine if they are interested (i.e., the holder of the right of first refusal) before it is given to a third party.

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Rising star companies have a low credit rating (often "junk"), but only because they are new to the bond market or still establishing a track record. 

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Risk averse is an oft-cited assumption in finance that an investor will always choose the least risky alternative, all things being equal.

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A risk free rate of return, often denoted in formulas as rf,, is the rate of return associated with an asset that has no risk (that is, it provides a guaranteed return). It is also commonly referred t

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A risk lover is an investor who has a high propensity to engage in risky investments. A risk lover is the opposite of a risk-averse investor.

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A risk-free asset is an asset that provides a virtually guaranteed return. 

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A road show is a presentation made about an investment opportunity usually given by a representative of a company at the offices of potential investors. 

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ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically

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The rolling EPS is a variation of the earnings per share (EPS) metric which measures a company's profitability.

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Rolling returns are the returns on an investment measured over several periods.

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A Roth IRA is a type of Individual Retirement Account (IRA) for individuals who fall below certain income thresholds. One of the primary benefits to investing in a Roth IRA is that distribut

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A round lot is a securities trade for 100 trading units. In stock trading, a round lot is 100 shares. However, inactive stocks generally trade in 10-share lots.

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A rounding error is a mistake made when rounding a number up or down.  

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A routing number is a exclusive identification number assigned to banking institutions by the American Bankers Association (ABA).

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Roy's safety-first rule is a measure of the minimum returns an investor requires from a portfolio. The formula for Roy's safety-first rule is: Roy's Safety-First Rule = (Expected retu

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A royalty trust is a type of corporation created to act as the owner of the mineral rights to wells, mines and similar properties.  It exists only to pass income generated from the sale of the pr

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The RSI indicator mirrors and anticipates price patterns in the underlying stock or index chart. The indicator's designer, Welles Wilder, intended for the RSI Indicator to help traders spot chart

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The "rule of 72" is a method of estimating how long it will take compounding interest to double an investment.

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A run occurs when a flood of depositors withdraw their funds from a bank within a short time frame.

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A runs test is a statistical procedure that can be used to decide if a data set is being generated randomly, or if there is some underlying variable that is driving results.

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The Russell 1000 Index is designed to track the performance of most major large-cap companies. Though it is not usually cited by individual investors, it is the third most widely used benchmark by mon

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The Russell 2000 index measures the performance of the 2,000 smallest companies in the Russell 3000 index. The Frank Russell Company created the index in 1984, and it was one of the first broad benchm

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Started in 1984, the Russell 3000 Index attempts to capture the return of the overall market. The index can be subdivided into two segments: the Russell 1000 (consisting of the 1000 largest m

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A Russian option is a type of lookback option which does not have an expiration date.

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