R-Squared

Statistical measure showing how much of a variable’s movement is explained by a model.

Rabbi Trust

Irrevocable trust for deferred compensation, protecting employee benefits from insolvency.

Race to the Bottom

Competition lowering standards, like wages or regulations, to cut costs.

Racketeering

Organized illegal activities, like extortion, impacting financial systems.

Rally

A rapid increase in asset prices after a decline or stagnation.

Ramp Up

Increasing production or operations, often raising financial costs initially.

Random Variables

Variables with uncertain outcomes, used in financial risk modeling.

Random Walk Theory

Theory that stock prices move unpredictably, challenging market timing.

Range

The difference between a security’s high and low prices over a period.

Ratchet Effect

Irreversible economic changes, like wage increases, persisting despite downturns.

Rate-and-Term Refinance

Refinancing to change loan interest rate or term, not borrowing more.

Rate of Change (ROC)

Technical indicator measuring price change speed, signaling momentum.

Rate of Return

Profit or loss on an investment, expressed as a percentage.

Rating

Credit or investment quality score, like bond ratings by S&P or Moody’s.

Ratio Analysis

Evaluating financial health using metrics like P/E or debt-to-equity.

Rational Behavior

Decision-making maximizing benefits, assumed in economic models.

Rational Choice Theory

Theory that individuals make logical choices to maximize utility or profit.

Rational Expectations Theory

Economic theory assuming people predict outcomes using all available information.

Rationalization

Justifying financial decisions or restructuring to improve efficiency.

Rationing

Limiting resource allocation, like credit or goods, due to scarcity.

Raw Materials

Inputs for production, like metals, impacting manufacturing costs.

Reaganomics

Reagan-era policies of tax cuts, deregulation, and reduced government spending.

Real Asset

Tangible or intangible assets, like property or patents, not securities.

Real Economic Growth Rate

GDP growth adjusted for inflation, measuring true economic expansion.

Real Effective Exchange Rate (REER)

Currency value against a basket, adjusted for inflation, showing competitiveness.

Real Estate

Land and buildings, a major asset class for investment or development.

Real Estate Agent

Licensed professional facilitating property transactions, earning commissions.

Real Estate Investment Group

Pooled investors buying properties for income or appreciation.

Real Estate Investment Trust (REIT)

Publicly traded entity investing in income-producing real estate, distributing dividends.

Real Estate Limited Partnership (RELP)

Partnership investing in real estate, with limited liability for investors.

Real Estate Mortgage Investment Conduit (REMIC)

Vehicle issuing mortgage-backed securities, passing income to investors.

Real Estate Operating Company (REOC)

Company managing real estate, reinvesting profits rather than distributing dividends.

Real Estate Owned (REO)

Foreclosed properties owned by lenders, often sold at a discount.

Real Estate Settlement Procedures Act (RESPA)

U.S. law regulating mortgage closings, ensuring transparency and fairness.

Real Estate Short Sale

Selling a property for less than its mortgage to avoid foreclosure.

Real Gross Domestic Product (GDP)

GDP adjusted for inflation, reflecting true economic output.

Real Income

Income adjusted for inflation, showing actual purchasing power.

Real Interest Rate

Nominal interest rate minus inflation, reflecting true borrowing cost.

Real Option

Decision-making flexibility in investments, like delaying or expanding projects.

Real Property

Land and fixed assets, like buildings, distinct from personal property.

Real Rate of Return

Investment return adjusted for inflation, showing true gains.

Real Time

Immediate data or transaction processing, like live stock quotes.

Real-Time Gross Settlement (RTGS)

Instant interbank payment system, ensuring immediate fund transfers.

Real-Time Quote (RTQ)

Current security price updated instantly, used in trading platforms.

Realization Multiple

Investment return as a multiple of capital invested, used in private equity.

Realized Gain

Profit from selling an asset above its purchase price.

Realized Loss

Loss from selling an asset below its purchase price.

Realized Yield

Actual bond yield, accounting for purchase price and cash flows.

Realtor

Licensed real estate agent, member of the National Association of Realtors.

Rebalancing

Adjusting portfolio allocations to maintain target risk or asset mix.

Rebate

Partial refund, like tax rebates or discounts, reducing costs.

Recapitalization

Restructuring a company’s debt and equity to improve financial stability.

Receipt

Document proving payment or transaction, used in accounting.

Receivable

Money owed to a company, like accounts receivable, on balance sheets.

Receivables Turnover Ratio

Net sales divided by average receivables, measuring collection efficiency.

Receivership

Legal state where a receiver manages a distressed firm’s assets.

Recency, Frequency, Monetary Value (RFM)

Marketing metric analyzing customer purchase behavior for segmentation.

Recession

Economic decline with falling GDP, typically lasting two quarters.

Recessionary Gap

When actual GDP is below potential, signaling underperformance.

Recharacterization

Changing an IRA contribution type, like Roth to Traditional, for tax purposes.

Reconciliation

Matching financial records, like bank statements, to ensure accuracy.

Record Date

Date shareholders must be registered to receive dividends or vote.

Recourse

Lender’s right to seek repayment beyond collateral, increasing borrower liability.

Recourse Loan

Loan allowing lenders to pursue borrower assets if collateral is insufficient.

Recovery Rate

Percentage of loan recovered after default, key in credit analysis.

Recurring Billing

Automatic, periodic payments, like subscriptions, ensuring steady revenue.

Recurring Revenue

Predictable, ongoing income, like from subscriptions or contracts.

Red Herring Filing

Preliminary prospectus for an IPO, subject to SEC revisions.

Redemption

Repaying or repurchasing securities, like bonds at maturity.

Redlining

Illegal denial of services, like loans, based on geographic or demographic factors.

Reference Number

Unique identifier for financial transactions, aiding tracking.

Reference Rate

Benchmark rate, like SOFR, for loans or derivatives pricing.

Refinance

Replacing an existing loan with a new one, often for better terms.

Reflexivity

Theory that market perceptions influence fundamentals, creating feedback loops.

Registered Education Savings Plan

Canadian tax-advantaged plan for education savings, with government grants.

Registered Investment Advisor (RIA)

SEC-registered firm or individual providing investment advice, often fiduciary.

Registered Representative (RR)

Licensed professional selling securities or advising clients, regulated by FINRA.

Regression

Statistical method modeling relationships between variables, used in finance.

Regressive Tax

Tax rate decreasing as income rises, like sales taxes, impacting lower earners.

Regret Theory

Behavioral theory where decisions are influenced by avoiding future regret.

Regtech

Technology for regulatory compliance, like anti-money laundering systems.

Regulated Investment Companies (RICs)

Funds like mutual funds passing income to investors, avoiding double taxation.

Regulation A

SEC rule allowing smaller firms to raise capital with simplified filings.

Regulation B (Reg B)

ECOA rule prohibiting credit discrimination based on race, gender, or other factors.

Regulation CC

U.S. rule governing fund availability and check clearing timelines.

Regulation D (Reg D)

SEC rule for private placements, exempting certain offerings from registration.

Regulation DD

Truth in Savings Act rule requiring clear bank account disclosures.

Regulation E

U.S. rule protecting consumers in electronic fund transfers, like debit cards.

Regulation O

Fed rule limiting loans to bank insiders, preventing conflicts of interest.

Regulation SHO

SEC rule regulating short selling, like uptick rules, to prevent manipulation.

Regulation T (Reg T)

Fed rule governing margin accounts, setting borrowing limits for securities.

Regulation U

Fed rule limiting bank loans for securities purchases, ensuring compliance.

Regulation W

Fed rule restricting transactions between banks and affiliates, reducing risk.

Regulation Z

Truth in Lending Act rule requiring clear loan and credit disclosures.

Regulatory Capture

When regulators favor industries over public interest, skewing financial oversight.

Regulatory Risk

Risk of losses from new or changing regulations, impacting businesses.

Rehypothecation

Reusing collateral, like securities, for further borrowing, increasing risk.

Reimbursement

Repayment for expenses, like insurance claims or business costs.

Reinsurance

Insurance for insurers, transferring risk to another party.

Reinsurance Ceded

Risk or premiums transferred to a reinsurer, reducing insurer liability.

Reinvestment

Using investment proceeds to purchase additional assets, compounding returns.

Reinvestment Rate

Rate earned on reinvested cash flows, impacting total returns.

Reinvestment Risk

Risk of lower returns when reinvesting at lower rates, like in bonds.

Related-Party Transactions

Deals between connected entities, like subsidiaries, requiring disclosure.

Relationship Management

Building client trust in financial services, like banking or advisory.

Relationship Manager

Professional managing client accounts, ensuring satisfaction and retention.

Relative Purchasing Power Parity (RPPP)

Theory that exchange rate changes match inflation differences between countries.

Relative Strength

Comparing a security’s performance to a benchmark or peers.

Relative Strength Index (RSI)

Momentum indicator (0-100) signaling overbought (>70) or oversold (<30) conditions.

Relative Valuation Model

Valuing assets by comparing to similar assets, like P/E ratios.

Relative Value

Assessing an asset’s worth compared to others, used in trading strategies.

Relative Vigor Index (RVI)

Technical indicator measuring trend strength via price and range data.

Relevant Cost

Costs impacting a specific financial decision, like incremental expenses.

Relief Rally

Temporary price increase after a decline, often due to short covering.

Remittance

Money sent, typically internationally, like migrant worker payments.

Remuneration

Compensation, like salaries or bonuses, for services or work.

Renewable Energy Certificate (REC)

Tradable certificate proving renewable energy production, used in green investing.

Renewable Resource

Resources like solar energy, impacting sustainable investment strategies.

Renko Chart

Price chart ignoring time, plotting bricks for significant price moves.

Rent Control

Government limits on rent increases, affecting real estate income.

Rent Seeking

Gaining wealth without creating value, like through lobbying or monopolies.

Renter's Insurance

Coverage for tenants’ personal property and liability, low-cost protection.

Reorganization

Restructuring a firm’s operations or finances, often in bankruptcy.

Repackaging

Restructuring financial assets, like securitizing loans, for resale.

Repatriable

Funds transferable to a home country, relevant in international investing.

Repatriation

Returning foreign-earned profits or assets to the home country.

Repayment

Settling a debt, like loan principal and interest, per terms.

Replacement Cost

Cost to replace an asset at current prices, used in valuation or insurance.

Replacement Rate

Income percentage replaced by retirement benefits, like Social Security.

Representative Sample

A subset mirroring a larger population, used in financial research.

Repudiation

Refusal to honor a contract or debt, risking legal or financial consequences.

Repurchase Agreement (Repo)

Short-term loan where securities are sold with a buyback agreement.

Reputational Risk

Potential loss from negative public perception, impacting financial performance.

Request for Quote (RFQ)

Soliciting price quotes from suppliers or brokers, used in trading or procurement.

Requests for Proposal (RFP)

Inviting bids for services or projects, common in financial contracts.

Required Minimum Distribution (RMD)

Mandatory IRA withdrawals post-age 73, per IRS rules, to avoid penalties.

Required Rate of Return (RRR)

Minimum return investors demand for an investment, based on risk.

Requisition

Formal request for funds or resources, used in budgeting or procurement.

Research Analysts

Professionals analyzing securities or markets, issuing investment recommendations.

Research and Development (R&D)

Innovation spending, critical for tech or pharma firm valuations.

Research and Development (R&D) Expenses

Costs for innovation, reported on income statements, impacting profits.

Research Associate

Junior analyst supporting financial research, often in investment banks.

Research Report

Detailed analysis of a security or market, guiding investment decisions.

Reserve Bank of India (RBI)

India’s central bank, managing monetary policy and currency stability.

Reserve Currency

Globally accepted currency, like USD, for trade and reserves.

Reserve Fund

Savings for unexpected expenses or obligations, like in HOAs or businesses.

Reserve Price

Minimum acceptable price at an auction, ensuring seller protection.

Reserve Ratio

Percentage of deposits banks must hold, set by central banks.

Reserve Requirements

Funds banks must hold in reserve, influencing money supply.

Resident Alien

Non-citizen living in a country, subject to local tax rules.

Residential Mortgage-Backed Security (RMBS)

Securities backed by home mortgages, pooling loan payments for investors.

Residual Dividend

Dividend policy paying out remaining profits after capital needs.

Residual Income

Income after expenses and costs, used in personal or corporate finance.

Residual Standard Deviation

Measure of regression model error, used in financial forecasting.

Residual Sum of Squares (RSS)

Total squared differences between predicted and actual values in regression.

Residual Value

Asset’s value at the end of its useful life, like leased cars.

Resistance (Resistance Level)

Price level where selling pressure halts upward price movement.

Resolution Trust Corporation (RTC)

U.S. agency (1989-1995) managing failed thrifts during the S&L crisis.

Resource Curse

Economic paradox where resource-rich nations face slow growth or instability.

Restatement

Revising financial statements to correct errors, impacting investor trust.

Restricted Cash

Cash set aside for specific purposes, like loan repayments, on balance sheets.

Restricted Stock

Company shares with sale or transfer restrictions, often for employees.

Restricted Stock Unit (RSU)

Employee stock grants vesting over time, taxed upon delivery.

Restrictive Covenant

Agreement limiting actions, like non-competes or loan restrictions.

Restructuring

Reorganizing a firm’s operations or finances to improve efficiency or solvency.

Restructuring Charge

One-time cost for reorganization, like layoffs, impacting financials.

Resume

Document summarizing skills and experience, used in financial job applications.

Retail Banking

Banking services for individuals, like checking accounts or mortgages.

Retail Investor

Individual investor trading for personal accounts, not institutions.

Retail Price Index (RPI)

UK measure of consumer price inflation, including housing costs.

Retail Sales

Consumer goods purchases, a key economic indicator influencing markets.

Retained Earnings

Profits not distributed as dividends, reinvested in the company.

Retainer Fee

Upfront payment for ongoing services, like legal or financial advisory.

Retention Bonus

Incentive paid to retain employees, often during mergers or transitions.

Retention Ratio

Proportion of earnings retained, calculated as 1 minus payout ratio.

Retirement Income Certified Professional (RICP)

Credential for advisors specializing in retirement income planning.

Retirement Money Market Account

Low-risk account for retirees, offering liquidity and modest returns.

Retirement Planning

Strategies to ensure financial security in retirement, like saving or investing.

Retracement

Temporary price reversal within a larger trend, used in technical analysis.

Retrocession

Reinsurer transferring risk to another reinsurer, spreading liability.

Return

Profit or loss from an investment, expressed as a percentage.

Return of Capital (ROC)

Payment returning part of an investor’s original investment, often tax-free.

Return on Assets (ROA)

Net income divided by total assets, measuring asset efficiency.

Return on Average Assets (ROAA)

Net income divided by average assets, assessing bank profitability.

Return on Average Capital Employed (ROACE)

Profit divided by average capital employed, evaluating investment efficiency.

Return on Average Equity (ROAE)

Net income divided by average equity, measuring shareholder return.

Return on Capital Employed (ROCE)

Operating profit divided by capital employed, assessing efficiency.

Return on Equity (ROE)

Net income divided by shareholders’ equity, measuring profitability.

Return on Invested Capital (ROIC)

Profit divided by invested capital, evaluating investment effectiveness.

Return on Investment (ROI)

Profit divided by investment cost, measuring return efficiency.

Return on Net Assets (RONA)

Net income divided by net assets, assessing asset utilization.

Return on Revenue (ROR)

Net income divided by revenue, showing profit per sales dollar.

Return on Risk-Adjusted Capital (RORAC)

Profit divided by risk-adjusted capital, used in banking.

Return on Sales (ROS)

Operating profit divided by revenue, measuring sales efficiency.

Return on Total Assets (ROTA)

Operating income divided by total assets, assessing asset productivity.

Returned Payment Fee

Charge for failed payments, like bounced checks or declined cards.

Revaluation

Adjusting asset or currency values, like revaluing foreign reserves.

Revaluation Reserve

Account for unrealized gains from asset revaluation, on balance sheets.

Revealed Preference

Economic theory inferring preferences from consumer behavior, not stated desires.

Revenue

Total income from sales or services, a key financial metric.

Revenue Agent's Report (RAR)

IRS report detailing audit findings, proposing tax adjustments.

Revenue Bond

Municipal bond repaid from project revenue, like tolls, not taxes.

Revenue Cap Regulations

Rules limiting revenue a regulated firm, like utilities, can earn.

Revenue Deficit

When government revenue falls short of expenditures, increasing debt.

Revenue Generating Unit (RGU)

Metric tracking revenue-producing customers or services, like telecom subscribers.

Revenue Officer

IRS employee collecting unpaid taxes or investigating tax issues.

Revenue Passenger Mile (RPM)

Airline metric of paid passenger miles flown, measuring revenue activity.

Revenue per Available Room (RevPAR)

Hotel metric of revenue divided by available rooms, assessing performance.

Revenue per Available Seat Mile (RASM)

Airline revenue per seat mile, measuring pricing efficiency.

Revenue per Employee

Revenue divided by employee count, assessing workforce productivity.

Revenue per User (RPU)

Revenue divided by user count, key for tech or subscription businesses.

Revenue Recognition

Accounting principle recording revenue when earned, not when paid.

Reversal

A change in price trend direction, like from uptrend to downtrend.

Reverse Auction

Buyers set prices, and sellers bid lower, used in procurement.

Reverse Culture Shock

Adjustment challenges returning home, impacting expatriate financial decisions.

Reverse ICO

Established firms issuing tokens to raise capital via blockchain.

Reverse Morris Trust

Tax-efficient merger where a parent spins off a subsidiary to merge with another firm.

Reverse Repurchase Agreement

Buying securities with an agreement to resell, used in monetary policy.

Reverse Stock Split

Reducing shares outstanding by consolidating, increasing share price.

Reverse Takeover (RTO)

Private firm acquiring a public one to go public without an IPO.

Reverse Triangular Mergers

Subsidiary merging into a target firm, used in acquisitions for efficiency.

Revocable Beneficiary

Beneficiary designation changeable by the policyholder, like in insurance.

Revocable Trust

A trust alterable during the grantor’s life, used in estate planning.

Revolver

A revolving credit line, allowing repeated borrowing up to a limit.

Revolving Credit

Credit line allowing repeated borrowing and repayment, like credit cards.

Revolving Door

Movement of personnel between regulators and industries, raising conflict concerns.

Revolving Loan Facility

A flexible loan allowing drawdowns and repayments, used by businesses.

Rho

Option sensitivity to interest rate changes, impacting pricing.

Ricardian Equivalence

Theory that government borrowing doesn’t affect demand, as consumers save for future taxes.

Rider

Additional provision in insurance or contracts, modifying terms or coverage.

Right of First Offer

Priority to bid on an asset before others, common in real estate.

Right of First Refusal

Right to match an offer before a sale, used in partnerships or real estate.

Right of Rescission

Right to cancel certain contracts, like mortgages, within a short period.

Right-to-Work Law

State laws preventing forced unionization, impacting labor costs.

Rights Offering (Issue)

Offering existing shareholders new shares at a discount, raising capital.

Ring-Fence

Isolating assets or operations, like in banking, to limit risk.

Ripple

Blockchain platform for cross-border payments, used in financial services.

Ripple (Cryptocurrency)

XRP, Ripple’s cryptocurrency, facilitating fast, low-cost global transactions.

Risk

Potential for financial loss or uncertainty in investments or operations.

Risk-Adjusted Return

Return adjusted for risk, like Sharpe ratio, for fair performance comparison.

Risk-Adjusted Return On Capital (RAROC)

Profit divided by risk-adjusted capital, used in banking for efficiency.

Risk Analysis

Assessing potential losses or uncertainties in financial decisions.

Risk Assessment

Evaluating risks’ likelihood and impact, guiding financial strategies.

Risk-Averse

Preference for lower risk, influencing conservative investment choices.

Risk-Based Capital Requirement

Minimum capital banks hold based on asset risk, per regulations.

Risk Control

Strategies to minimize financial losses, like hedging or diversification.

Risk-Free Asset

An asset with no default risk, like U.S. Treasuries, used in models.

Risk-Free Rate Of Return

Return on risk-free assets, like T-bills, a benchmark for investments.

Risk Management

Identifying, assessing, and mitigating financial or operational risks.

Risk Measures

Metrics like VaR or beta quantifying financial risk exposure.

Risk Neutral

Indifference to risk, assuming equal preference for outcomes, used in models.

Risk-Neutral Measures

Probabilities adjusted for risk neutrality, used in option pricing.

Risk-Neutral Probabilities

Probabilities assuming no risk premium, used in derivative valuation.

Risk-On Risk-Off

Market sentiment shifting between high-risk (on) and safe assets (off).

Risk Parity

Portfolio strategy balancing risk across assets, not capital allocation.

Risk Premium

Extra return for taking on risk, like equity over risk-free rates.

Risk Profiles

Description of an investor’s or asset’s risk tolerance and exposure.

Risk-Return Tradeoff

Higher potential returns come with higher risk, guiding investment choices.

Risk Reversal

Options strategy combining a call and put to hedge or speculate.

Risk/Reward Ratio

Potential gain versus loss in an investment, guiding decisions.

Risk Tolerance

An investor’s ability or willingness to endure financial risk.

Risk-Weighted Assets

Bank assets adjusted for risk, determining capital requirements.

Rival Good

Goods reduced by consumption, like fuel, unlike public goods.

Roadshow

Presentations to investors before an IPO or bond offering, pitching opportunities.

Robber Baron

19th-century tycoons using unethical practices, relevant in corporate governance discussions.

Robinson-Patman Act

U.S. law preventing price discrimination, ensuring fair competition.

Robo Advisor

Automated platform offering low-cost, algorithm-driven investment advice.

Robotic Process Automation (RPA)

Software automating repetitive financial tasks, like data entry.

Robust

Financial models or systems resilient to errors or market changes.

Rogue Trader

Trader making unauthorized trades, risking significant losses, like Nick Leeson.

Roll Back

Reducing prices or reversing policies, often to stimulate demand.

Roll-Down Return

Bond price gain as it approaches maturity, assuming stable yields.

Roll Forward

Extending a contract or position, like futures, to a later date.

Roll Yield

Profit or loss from rolling futures contracts, based on price differences.

Rolling Returns

Average returns over multiple periods, smoothing performance analysis.

Rollover

Transferring funds, like from one IRA to another, avoiding taxes.

Rollover Risk

Risk of unfavorable terms when refinancing maturing debt.

Roth 401(k)

Retirement plan with after-tax contributions, offering tax-free withdrawals.

Roth IRA

Individual retirement account with after-tax contributions, tax-free growth.

Round Lot

Standard trading unit, like 100 shares, for efficient transactions.

Routing Transit Number (RTN)

Nine-digit code identifying banks for transactions, like ACH or checks.

Roy's Safety-First Criterion (SFRatio)

Portfolio selection minimizing the risk of returns falling below a threshold.

Royalty

Payment for using intellectual property or resources, like oil or patents.

Rule 10b-5

SEC rule prohibiting securities fraud, like insider trading or misstatements.

Rule 10b-18

SEC safe harbor for stock repurchasing, reducing market manipulation risk.

Rule 10b5-1

SEC rule allowing pre-set trading plans to avoid insider trading charges.

Rule 144

SEC rule governing sales of restricted or control securities, setting conditions.

Rule 144A

SEC rule allowing private resale of securities to qualified institutional buyers.

Rule of 70

Estimating time for an investment to double, dividing 70 by growth rate.

Rule of 72

Similar to Rule of 70, using 72 for doubling time estimation.

Rule 72(t)

IRS rule allowing penalty-free early IRA withdrawals under specific conditions.

Rule of 78

Loan interest allocation method, front-loading interest, now less common.

Rule of Thumb

Informal guideline, like budgeting rules, for quick financial decisions.

Run Rate

Annualized financial metric based on current performance, like revenue.

Runoff Insurance

Coverage for claims after a policy ends, common in professional liability.

Russell 1000 Index

Tracks 1,000 largest U.S. stocks, representing large-cap market performance.

Russell 2000 Index

Tracks 2,000 small-cap U.S. stocks, a benchmark for smaller firms.

Russell 3000 Index

Tracks 3,000 largest U.S. stocks, covering most of the market.