Glossary | R
|A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | Y | Z | 0-9|
Rally: Brisk rise following a decline in the general price level of the stock market, or in an individual stock.
Rating: Bonds are rated for credit safety by various rating organizations such as Standard & Poor's and Moody's. These firms rate the companies and municipalities issuing bonds according to their likelihood of being able (in the estimation of the rating agency) to repay principal and make interest payments. Ratings range from AAA or Aaa (the highest) to C or D (representing a company in default).
Rating Service: Company such as Moody's or Standard & Poor's that rates various debt and preferred stock issues for safety of payment of principal, interest or dividends. The issuing company or municipality pays a fee for the rating.
RBD: Required Beginning Date. On April 1 of the year after reaching age 70½, a retirement account holder must begin withdrawing an RMD. For qualified retirement plans, the RBD is generally the later of April 1 of the year after reaching 70½ or April 1 of the year following the employee's termination of employment.
Realized Capital Gain/Loss: Actual profit or loss incurred from the sale of a security.
Record Date: Day on which a company closes its stockholder register to (i) identify the recipients of an approaching dividend distribution or (ii) who are entitled to vote at a meeting of shareholders.
Redemption: Process of converting mutual fund shares into cash. Also known as Liquidate.
Redemption Fees: Unlike a CDSC, this is usually a relatively small percentage, such as one percent of the amount sold, and it typically remains at a fixed level. This charge usually is not imposed forever, rather, only on fund shares sold within a specified time period from purchase, such as six months.
Registrar: Agency responsible for keeping track of the owners of bonds and the issuance of stock. Also prevents the issuance of more stock than authorized by a company.
Registration Statement: Disclosure document filed with the Securities and Exchange Commission to register a security for sale. The statement includes a prospectus, required to be delivered prior to or with the confirmation of a sale of a security. It also outlines financial details, a history of the company's operations and management, investment objectives, risks and other facts material to an investor's investment decision.
Reinvestment: The purchase of additional fund shares using a distribution.
Reinvestment Date: The date that a distribution is used to purchase additional fund shares. This occurs on the same day that the distribution is paid (the ex-dividend date).
Reinvestment Privilege: Allows a client to reinvest up to the number of Class A shares redeemed, within 30 days of redemption, at the then prevailing Net Asset Value without a sales load, or reinstate the account for the purposes of exercising the Exchange Privilege. The Reinvestment Privilege may be exercised only once.
REPO: Repurchase Agreement. Acquisition by a fund of an underlying debt security whereby the seller agrees to repurchase the securities, and the fund will resell the security at a decided price and time (usually within 7 days).
Reserve Requirement: Federal Reserve limitation imposed upon member banks requiring them to keep financial assets in the form of cash and other liquid assets as a percentage of demand deposits and time deposits.
Retirement Plans: Programs which provide employee savings for after retirement. Can be based on both employee and employer contributions.
Return: Profit on a security or capital investment usually expressed as an annual percentage rate.
Revenue Bond: Kind of municipal bond issued to finance public works such as bridges or tunnels or sewer systems, and supported directly by the revenues of the project. Pays federally tax-free income.
Reversal: Canceling a transaction which was processed in error.
Reverse Stock Splits: Most stock splits are executed in order to increase the number of shares outstanding. Sometimes, a reverse stock split is declared, which serves to reduce the number of shares outstanding and increase the share price of the stock by exchanging less than one share of new stock for each outstanding share.
Right of Accumulation: Ability to reduce the sales charge payable on purchases based on the aggregate current market value of assets from previous purchases.
Right of Survivorship: Right entitling one owner of property held jointly to take title to it when the other owner dies.
Rights Offering: Rights are a special type of option that have a short market life (usually no more than a few weeks). The right enables the shareholder to buy shares of the new issue at a specified price prior to sale publicly. Rights also have intrinsic value: they can be sold in the open market separate from the original stock.
Risk: The measurable possibility of losing or not gaining value. Risk is differentiated from uncertainty, which is not measurable.
RMD: Required Minimum Distribution. The minimum amount that the IRS requires to be withdrawn each year from all tax-advantaged retirement plans. Roth IRAs are exempt from this rule during the owner’s lifetime. Also referred to as "minimum required distribution."
Rollover: Process in which retirement plan proceeds are delivered directly to a plan participant who, within 60 days, invests them in a new IRA plan or other similar tax-deferred vehicle to avoid the imposition of certain penalties and/or taxes.
Rollover IRA: An IRA established to receive amounts distributed from a qualified retirement plan, such as a 401(k) Plan. A Rollover IRA can be established as a direct rollover from the distributing plan to the IRA Trustee or Custodian, or as an indirect rollover when amounts are first received by a plan participant and subsequently deposited into a Rollover IRA, usually within 60 days of distribution from the plan.
Roth IRA: A nondeductible IRA introduced by the Taxpayer Relief Act of 1997. Distributions are tax free if they meet certain requirements (income, time since the Roth IRA was established, age of the Roth IRA owner, etc.).
Rule 2a-7: Investment Company Act of 1940 regulation providing for mutual funds which seek to hold themselves out as money market funds or which seek to use "money market" in their name to maintain a weighted average portfolio maturity of 90 days or less and to not invest in securities with remaining maturities exceeding 13 months, among other portfolio quality and diversification requirements. Designed to help insure that money market funds can maintain a stable $1 share price, which is not guaranteed.
Rule 12b-1 Plan: Written plan pursuant to which a fund can make payments out of fund assets to finance advertising, distribution and other promotional expenses.
Rule 18F-3: An Amendment to the Investment Act of 1940 which allows Registered Open-End Investment Management Companies to issue multiple classes of shares without the need to obtain an exemptive order under section 18 of the 1940 Act. The rule became effective on April 3, 1995.