Rally: A brisk rise in the price of a security or a recovery in the market.
Rate of Return: The yield that can be attained on a security, based on its purchase price or its current market price. On a bond, the rate of return may be the amortized yield to maturity or the current income return. Also refers to income earned on an investment, expressed as a percentage of the cost of the investment.
Rating: The designation used by investors’ services to rate a security. Moody’s ratings range from Aaa (the highest) through Aa, A, Baa, Ba, B, and so on. Standard and Poor’s ratings range from AAA (the highest) through AA, A, BBB, BB, B, and so on.
Realized Gain/Loss: Actual profit or loss experienced upon the sale of a security. Compare Paper Gain/Loss.
Redemption: Liquidating debt by retiring an outstanding obligation. This may occur at maturity but usually occurs at the issuer’s option, such as when a bond issue is retired before its maturity date.
Redemption Fund: A fund created for the purpose of retiring a callable obligation that matures in stages or for purchasing such an obligation as funds become available.
Redemption Price: The price at which a bond may be redeemed, at the issuer’s option, before maturity.
Refinancing: Rolling over the principal on securities that have reached maturity or replacing them with the sale of new issues. The object may be to save interest costs or to extend the maturity of the loan. See Refunding.
Refunding: Replacing an outstanding obligation on or before its maturity with a new issue in order to extend the length of the borrowing, change the interest rate, consolidate issues, or postpone payment until a more opportune time.
Registered Bond: A bond whose principal and/or interest is payable only to the person or organization registered with the issuer. This bond can be transferred only when endorsed by the registered owner.
Regular-Way Delivery: Unless otherwise specified, most government securities sold are to be delivered and paid for on the business day following the transaction. Regular delivery for municipal and corporate securities, however, is three business days. Retire: To withdraw a security from circulation, usually by redeeming it.
Revenue Anticipation Notes (RANs): Short-term notes sold in anticipation of receiving future revenues. The notes are to be paid from the proceeds of those revenues.
Revenue Bond: A state or local bond secured by revenues derived from the operations of specific public enterprises, such as bridges, toll roads, or utilities. Such bonds are not generally backed by the taxation power of the issuer unless otherwise specified in the bond indenture.
Rich: Description of the price of a security when the current market quotation appears to be high (or the income return low) in comparison with either the past price record of the security or the current prices of comparable securities.
Rights: The privilege extended by an issuer to the holder of a security to subscribe to new or additional securities, sometimes at a price lower than the subscription price. This allows current stockholders the opportunity to avoid diluting their percentage of ownership.
Roll Over: To reinvest in a new issue of the same or a similar security after receiving funds from a matured security.
Round Lot: The normal minimum unit of trading for a particular issue or type of security. Compare Odd Lot.