Business / Finance Glossary

R Square (R2): Square of the correlation coefficient. The proportion of the variability in one series that can be explained by the variability of one or more other series a regression model. A measure of t . . . View Full Definition

Radar Alert: Close monitoring of trading patterns in a company's stock by senior managers to uncover unusual buying activity that might signal a takeover attempt. See: Shark watcher.

Raider: Individual or corporate investor who intends to take control of a company (often ostensibly for greenmail) by buying a controlling interest in its stock and installing new management. Raider . . . View Full Definition

Rainmaker: A valuable employee or manager who buys new business to a financial services company and thus generates income.

Rally (Recovery): An upward movement of prices. Opposite of reaction.

Random Variable: A function that assigns a real number to each and every possible outcome of a random experiment.

Random Walk: Theory that stock price changes from day to day are accidental or haphazard; changes are independent of each other and have the same probability distribution. Many believers in the random wa . . . View Full Definition

Randomized Strategy: A strategy of introducing into the decision-making process a chance element that is designed to confound the information content of the decision-maker's observed choices.

Range: The high and low prices, or high and low bids and offers, recorded during a specified time.

Range Forward: A forward exchange rate contract that places upper and lower bounds on the future cost of foreign exchange.

Rate Anticipation Swaps: An exchange of bonds in a portfolio for new bonds that will achieve the target portfolio duration, given the investor's assumptions about future changes in interest rates.

Rate Base: The value of a regulated public utility and its operations as defined by its regulators and on which the company is allowed to earn a particular rate of return.

Rate Covenant: A provision governing a municipal revenue project financed by a revenue bond issue, which establishes the rates to be charged users of the new facility.

Rate Lock: An agreement between the mortgage banker and the loan applicant guaranteeing a specified interest rate for a designated period, usually 60 days.

Rate Of Interest: The rate, as a proportion of the principal, at which interest is computed.

Rate Of Return: Calculated as the (value now minus value at time of purchase) divided by value at time of purchase. For equities, we often include dividends with the value now. See also: Return, annual rate . . . View Full Definition

Rate Of Return Ratios: Ratios that measure the profitability of a firm in relation to various measures of investment in the firm.

Rate Risk: In banking, the risk that profits may drop or losses occur because a rise in interest rates forces up the cost of funding fixed-rate loans or other fixed-rate assets.

Ratings: An evaluation of credit quality of a company's debt issue by Moody's, S&P, and Fitch Investors Service. Investors and analysts use ratings to assess the riskness of an investment.

Ratio: A comparison of financial statement elements in the form of a quotient. Ratios such as the price/earnings ratio, return on assets, and quick ratio are often used for analyzing financial statements.

Ratio Analysis: A way of expressing relationships between a firm's accounting numbers and their trends over time that analysts use to establish values and evaluate risks.

Ratio Of Average Price To Equity: The ratio of average annual High-Low prices to equity capital per share at corporate book value at the beginning of each calendar year.

Ratio Writer: An option writer who does not own the number of shares required to cover the call options he or she writes.

Rational Expectations: The idea that people rationally anticipate the future and respond today to what they see ahead. This concept was pioneered by Nobel Laureate, Robert E. Lucas, Jr.

Ratios Of High-Low Prices To Earnings: High-Low prices as a multiple of earnings per share.

Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226