| Qualified Assets | Assets that have been invested through a qualified retirement plan or an individual retirement account (IRA). Investment earnings are not subject to income taxes until withdrawn. Examples include funds held in a profit-sharing plan, an employee stock ownership plan or a pension plan. |
| Qualified Retirement Plan | A plan sponsored by an employer to provide retirement benefits for employees who meet certain regulatory requirements. The employer may deduct contributions to the plan and the employees do not include benefits in their taxable income until received, usually after they retire. See Defined-benefit plan and Defined-contribution plan. |
| Quality | 1). In general terms, the quality of a fixed-interest security is a measure of the reliability of the issuer in terms of whether interest and principal will be paid on time. See: credit rating agency. 2). The quality of a share is a measure of the stability of the market price, i.e. a high-quality share will not fluctuate widely. However, individual investors may have other subjective preferences associated with their opinions of quality. |
| Quarterly Refunding | Auctions of Treasury notes and bonds occurring in May, August, November, and February. |
| Quotation | The current bid price and the current ask price of a security. |
| Quote | The highest bid and lowest offer on a given security at a particular time. |
| R-Squared | The degree to which an asset's correlation with "the market" has explained its fluctuations over a specified period of time. Alpha and beta coefficients are calculated using a procedure known as "regression analysis," where points in a system of coordinates are generated by measuring "market" movements (the "independent variable") along the horizontal "X" axis and correlating them with movements in the asset (the "dependent variable") measured along the vertical "Y" axis. |
| Range | The high and low prices for the day for a security. |
| Rate Of Return | A measure of the amount an investment earns, usually expressed as an annual percentage. For example, if an investment of $100 earns $5 in one year, the rate of return is 5%. Frequently shortened to the "return" on an investment. |
| Rating | The alphabetical designation attesting to the investment quality of a bond. Treasury and agency securities are AAA-rated, said to be "investment grade." |
| Registered Certificates of Accrual on Treasury Securities (RATS) | Another trade name for derivative zeros backed by U.S. Treasury obligations. |
| Real Estate Fund | A fund that invests primarily in stocks of companies that participate in the real estate industry, such as mortgages and real estate investment trusts, but not real estate itself. |
| Real Return | The actual return earned on an investment after factoring in the rate of inflation. |
| Receiver's Certificate | A certificate issued when a company is in financial trouble. Its purpose is to provide the company with funds to complete processing cycles so that more money can be obtained through its liquidation. |
| Record Date | The date on which a shareholder must officially own a stock's shares in order to receive a company's declared dividend or to vote on company issues. |
| Red Herring | The preliminary prospectus. The name comes from the advisory that is printed on the face of the prospectus in red ink. |
| Redeem | To cash in shares by selling them back to the mutual fund. Mutual fund shares are redeemable on any business day. |
| Redemption | The retiring of a debt instrument by paying cash. |
| Redemption Date | The date on which a security (usually a fixed interest stock), is due to be repaid by the issuer at its full face value. The year is included in the title of the security; the actual redemption date is that on which the last interest is due to be paid. |
| Redemption Fee | A fee charged by some funds when shares are sold (redeemed). |
| Redemption Notice | A notice that a corporation or a municipality is calling or redeeming a certain issue of bonds. |
| Redemption Price | The price at which a mutual fund's shares are redeemed (bought back) by the fund. The value of the shares depends on the market value of the fund's portfolio of securities at the time. This value is the same as "net asset value per share." In the newspaper, this amount is shown as the "bid" price. |
| Refunding | The retiring of a debt instrument by issuing a new debt instrument. |
| Reg T Excess | In a margin account, the amount by which the loan value exceeds the debit balance. |
| Registered Bond | A bond on which the owner's name appears on the certificate. |
| Registered Form | The recording of a security's ownership on the issuer's central ledger. Anyone delivering the security must prove that he or she is, in fact, the person to whom the securities are registered to. |
| Registered to Principal Only | A feature of a bond whose ownership is recorded on a central ledger and whose interest payments are made only when coupons are detached and cashed in. Payments are not automatically sent to the owner. |
| Registered Trader | A member of an exchange who is responsible for adding "liquidity" to the marketplace by purchasing or selling assigned securities from his or her inventory. Also known as competitive market makers or option principal members. |
| Registrar | A commercial bank or trust company that controls the issuance of securities. |
| Registration Statement | Document filed with the Securities and Exchange Commission (SEC) explaining an impending issue and pertinent data about the issuer. Based on the information provided, the SEC either permits or prevents the issue from being offered. |
| Regular Way | Settlement on the third business day following the trade date. |
| Regular Way Contract | The first contract sheet received from NSCC that contains compared, uncompared, and advisory data. |
| Regular Way Delivery | A type of settlement calling for delivery on the third business day after trade dates for stocks, corporate bonds, municipals. For government bonds and options, delivery is the first business day after trade. |
| Regulation A | A regulation governing the issuance of new securities. |
| Regulation T (Reg T) | A federal regulation that governs the lending of money by brokerage firms to its customers. |
| Reinstatement Privilege | A shareholder who redeems fund shares, and then changes his or her mind, may have a onetime privilege of reinstating the investment by investing the proceeds of the redemption at net asset value (with no sales charge). There is generally a 30-day time limit for this service. |
| Reinvestment Opportunity | Ability to reinvest interest and principal paid by income securities. |
| Reinvestment Rate | Rate of interest earned by reinvesting interest payments rather than consuming them as current income. |
| Reinvestment Risk | The prospect that securities will not be able to pay higher rates of interest when general interest rates rise or retain previous levels of interest when general interest rates fall. |
| Renounceable Documents | Temporary evidence of ownership, of which there are four main types. When a company offers shares to the public, it sends an Allotment Letter to the successful applicants; if it makes a rights issue, it sends a Provisional Allotment Letter to its shareholders, or in the case of a capitalization issue, a Renounceable Certificate. All of these are in effect bearer securities and are valuable. Each includes full instructions on what the holder should do if he wishes to have the newly-issued shares registered in his name or if he wishes to renounce them in favor of somebody else. |
| Repurchase | The purchase of a security by the issuer. Normally associated with unit trust holdings where the units are repurchased by the managers from the holder or gilts at maturity (see: redemption date). See: repo. |
| Repurchase Agreement (Repo) | An agreement used to finance certain government and money market inventory positions. The brokerage firm sells securities to the financing organization with the agreement that the firm will repurchase them in the short-term future. |
| Restricted Account | As defined by Regulation T, a margin account in which the debit balance exceeds the loan value. |
| Restricted Securities | Unregistered securities acquired in a transaction that does not involve a public offering. |
| Retention Requirement | The amount that must be retained in a restricted margin account if anything is to be withdrawn. |
| Retirement Plan Income | Income received from a retirement plan. This does not include earnings that accrue within a retirement plan but are not yet distributed. |
| Revenue Anticipation Note (RAN) | A short-term debt instrument that is issued by municipalities and that is to be paid off by future (anticipated) revenue. |
| Revenue Bond | A municipal bond used to finance public works such as bridges, tunnels, or sewers. Principal and interest on the bond are paid directly from the revenues of the project, such as tolls. (Opposite: G.O., or General Obligation Bond, which relies on the taxpayers of a municipality to repay the debt.) |
| Right | A certificate showing that the stockholder has the privilege of purchasing new securities in proportion to the number of shares he owns before the general public. |
| Right Of Accumulation (ROA) | A right granted by some mutual funds that allows a shareholder to count existing holdings of the fund along with new purchases in determining the size of the sales fee on the new shares. This right applies to funds that offer discounts on high-volume investments. Thus the fee charged on succeeding purchases is determined by all purchases, past and present, not just by new purchases. |
| Rights Arbitrage | The simultaneous purchase and sale of different securities in anticipation of a merger or tender offer. |
| Rights Issue | An invitation to existing shareholders to purchase additional shares in the company. |
| Rights Offering | An offering that gives each shareholder a chance to exercise his preemptive rights. |
| Risk | The unpredictability of investment returns. The chance that the actual return from an investment will be different from its expected return. Investment risk is measured statistically using standard deviation. Investment risks include economic risk, inflation risk, interest rate risk, market risk and specific risk. |
| Risk Tolerance | The capacity to accept investment risk. This includes psychological factors relating to your willingness and financial factors relating to your financial need. These factors include your willingness to take chances, experience and understanding of financial markets and investment risks, investment time frame, access to other sources of income and capital, ability to make additional investments in the future, total value of your investment portfolio, proportion of your total portfolio that the particular investment represents and the extent to which you need to maximize return to meet specific investment goals. |
| Regulatory News Service (RNS) | A service operated by the Exchange, in its role as competent authority for listing, which ensures that price-sensitive information from listed and USM companies is collected and then disseminated to all RNS subscribers at the same time. |
| Right of Accumulation (ROA) | A right granted by some mutual funds that allows a shareholder to count existing holdings of the fund along with new purchases in determining the size of the sales fee on the new shares. This right applies to funds that offer discounts on high-volume investments. Thus the fee charged on succeeding purchases is determined by all purchases, past and present, not just by new purchases. |
| Rollover | The reinvestment of funds into another, often similar, investment. Often used when securities are maturing, or when moving an Individual Retirement Account |
| Roth Ira | An individual retirement fund. Contributions are not tax deductible, but withdrawals are tax exempt if an individual has been in the plan at least five years and is at least 59-1/2. Income limits and additional rules apply. |
| Round Lot | A standard trading unit. In common stocks, 100 shares make up a round lot. A round lot of bonds in the over-the-counter market is 5 bonds. |
| Rule 144 | Rule that governs the sale of control and restricted securities. |
| Rules Of Fair Practice | Part of the NASD rules that govern the dealings of firms with the public. |
| Russell 2000 | A commonly cited index of small-cap stocks. |