| 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earnings are not subject to income taxes until withdrawn.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. |
 |
^ top ^ |
