R

Question 1

Rapid growth stage

Answer 1

See Expansion stage

Question 2

Rating category

Answer 2

A statement about the expected return on a
stock relative to all other stocks in an equity
analyst’s coverage universe. See also
Coverage universe and Equity analyst

Question 3

Ratio analysis

Answer 3

The analysis of liquidity, risk analysis,
operating performance, and value ratios to
help forecast company performance. See
also Liquidity ratio, Risk analysis ratio,
Operating performance ratio, and
Value ratio.

Question 4

Rational expectations

Answer 4

Investors have rational expectations if they
all gather and act on information in an
efficient and unbiased way. See also Biased
expectations and Traditional finance

Question 5

Real body

Answer 5

A box used in candlestick charts that
visually represents the difference between
each period’s opening and closing price. See
also Candlestick chart.

Question 6

Real estate

Answer 6

Refers to land and/or any of the fixed assets
(residences, buildings, and factories) built
upon it

Question 7

Real Estate Investment Trust

REIT

Answer 7

An income trust that invests in and
manages a diversified portfolio of real estate
assets.

Question 8

Realized capital gain

Answer 8

The profit earned on a security when it is
sold for more than what was paid for it. See
also Net realized capital gains and
Unrealized capital gains

Question 9

Real-return bond

Answer 9

A debt security with coupon payments and
principal indexed to inflation. See also
Index ratio and Inflation compensation

Question 10

Re-balancing

Answer 10

Returning a portfolio back to its strategic
asset allocation. See also Temporal
re-balancing and Re-balancing by
weights.

Question 11

Re-balancing by weights

Answer 11

Re-balancing a portfolio in response to
fluctuations in the value of each asset class.
See also Re-balancing

Question 12

Recommended list

Answer 12

A list of best stock picks issued by an
investment dealer or other provider of
equity research.

Question 13

Record date

Answer 13

The date on which a shareholder must own
a company’s shares to be entitled to a
declared dividend. See also Dividend and
Ex-dividend date.

Question 14

Redeemable bond

Answer 14

A debt security that gives the holder the
right to request repayment of principal
from the issuer before maturity. Also known
as a putable bond.

Question 15

Registered account

Answer 15

An account for which contributions are
tax-deductible and/or the tax on investment
returns is deferred to a later date. See also
Registered Retirement Savings Plans
(RRSPs), Registered Retirement Income
Funds (RRIFs), and Registered
Educational Savings Plans (RESPs).

Question 16

Registered Education Savings Plan

RESP

Answer 16

A government-sponsored account used to
finance a child’s post-secondary education.
The tax on investment returns earned
within the account is deferred until money
is withdrawn. See also Registered account.

Question 17

Registered Retirement Income

Fund (RRIF)

Answer 17

A government-sponsored account used to 
fund an individual’s retirement. The tax on 
investment returns earned within the 
account is deferred until money is 
withdrawn. A minimum amount of money 
must be withdrawn from the account each 
year during retirement. See also Registered 
account.

Question 18

Registered Retirement Savings

Plan (RRSP)

Answer 18

A government-sponsored account used to
save for an individual’s retirement.
Contributions (up to a certain amount) are
tax deductible and the tax on investment
returns earned within the account is
deferred until money is withdrawn. See also
Registered account.

Question 19

Regret

Answer 19

A qualitative notion of risk in which an
investor dwells upon past mistakes, leading
to increased timidness regarding future
investment decisions.

Question 20

Regular dividend

Answer 20

A dividend shareholders may expect to
receive on an ongoing basis. See also
Dividend, Extra dividend, and Stock
dividend.

Question 21

Regulatory requirements

Answer 21

Any regulatory issues that limit or restrict
the way a portfolio is managed. See also
Legal requirements.

Question 22

Relative Strength Index (RSI)

Answer 22

An oscillator that measures the strength of
price gains on days that a stock closes up
versus the strength of price declines on
days that a stock closes down. See also
Oscillator.

Question 23

Relative valuation model

Answer 23

A valuation model that determines intrinsic
value by comparing one or more of the
stock’s value ratios or price multiples (such
as price- earnings, price-to-book, or
price-to-sales ratios) to a benchmark value
for the price multiple.

Question 24

Relative value hedge fund

Answer 24

A hedge fund that attempts to profit by 
exploiting inefficiencies or arbitrage 
opportunities in the pricing of related 
stocks, bonds, or derivatives. Relative value 
hedge funds generally have low or no 
exposure to the underlying market 
direction. See also Hedge fund.

Question 25

Relative Wealth Measure (RWM)

Answer 25

The RWM measures the amount per $1,000 of assets that needs to be invested at the pre-tax return to pay the tax liability.

Question 26

Research analyst

Answer 26

See Equity analyst.

Question 27

Residual

Answer 27

A debt security representing a fixed-coupon bond’s principal that has been stripped from the coupon payments. See Strip coupon.

Question 28

Resistance level

Answer 28

The price point(s) at which investors believe a stock is fully valued or possibly even overvalued. At this point, perceived return potential is limited, and many holders of the stock (or short sellers) are willing to sell. Because of the limited return potential, potential buyers are unwilling to buy. Prices tend to fall as supply overwhelms demand. See also Horizontal support, Horizontal resistance, and Support level.

Question 29

Restricted voting common shares

Answer 29

``` Common shares that limit the number of percentage of votes given to shareholders, or which limit the matters on which shareholders can vote. See also Common shares, Multiple voting common shares, Non-voting common shares, and Subordinated voting common shares. ```

Question 30

Return objective

Answer 30

A measure of how much the client’s portfolio is expected to earn each year on average.

Question 31

Return of Capital

Answer 31

Trust or fund distributions in excess of the | taxable income investors should receive

Question 32

Return On Equity (ROE)

Answer 32

Profit divided by common equity. ROE can also be calculated as the product of a company’s net profit margin, total asset turnover, and financial leverage. See also Net profit margin, Total asset turnover, and Financial leverage.

Question 33

Reversal formation

Answer 33

A chart pattern that helps confirm if a trend | reversal has taken place. See Trend reversal.

Question 34

Riding the yield curve

Answer 34

An active fixed income strategy that involves buying a bond with a maturity much longer than the investor’s time horizon. If the yield curve is upward sloping and its shape and level are expected to remain unchanged, the bond will increase in price with time.

Question 35

Risk analysis ratio

Answer 35

A ratio used to determine how well a | company deals with its debt obligations

Question 36

Risk arbitrage hedge fund

Answer 36

See Merger arbitrage hedge fund.

Question 37

Risk aversion

Answer 37

Investors are risk-averse if, given the choice between investments with identical expected returns, they invest in the one with the least amount of risk. See also Risk seeking and Traditional finance.

Question 38

Risk objective

Answer 38

Defines the amount of risk the client can tolerate to meet the return objective. A client’s risk objective is a function of their risk tolerance, which in turn depends on their willingness and ability to bear risk in their portfolio. See also Return objective and Risk tolerance.

Question 39

Risk premium

Answer 39

``` A measure of the expected return on an asset class minus the expected return on another asset class. ```

Question 40

Risk seeking

Answer 40

Investors are risk-seeking if, given the choice between investments with identical expected returns, they invest in the one with the greatest amount of risk. Risk-seeking behaviour by investors in certain situations is a key tenet of behavioural finance. See also Risk aversion and Behavioural finance.

Question 41

Risk tolerance

Answer 41

A specific statement of how much risk the client can sustain to meet the return objective. Risk tolerance depends on the client’s willingness and ability to bear risk.

Question 42

Risk-adjusted return measures

Answer 42

A measure of return that takes into account the level of risk taken to earn the return. Also, the returns generated by a fund compared to the level of risk taken to earn those returns. Because Risk-adjusted return measures incorporate both the risk and return of a fund, they can be used to compare funds with different investment mandates. See also Sharpe ratio and Alpha.

Question 43

Roll yield risk

Answer 43

The risk of loss in a futures contract-based ETF on the price convergence between the commodity futures contract and the commodity’s spot price.