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Rally |
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A brisk rise in the general price level of the market or of a given security.
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Ratio spread |
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A term most commonly used to describe the purchase of an option(s), call
or put, and the writing of a greater number of the same type of options
that are out-of-the-money with respect to those purchased. All options involved
have the same expiration date. For example, buying 5 XYZ May 60 calls and
writing 6 XYZ May 65 calls. |
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Ratio write |
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An investment strategy in which a security is purchased and call options
are written on a greater than one-for-one basis; i.e., for equity options,
more calls are written than the equivalent number of shares purchased. For
example, buying 500 shares of XYZ stock, and writing 6 XYZ May 60 calls.
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Real estate fund |
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A mutual fund that invests primarily in residential and/or commercial real
estate to produce income and capital gains for its unit holders.
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Real estate investment trust |
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A closed-end investment company that specializes in real estate or mortgage
investments. |
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Real interest rate |
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The nominal rate of interest minus the percentage change in the Consumer
Price Index. |
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Realised gains and losses |
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The net amount received or paid when a closing transaction is made and matched
together with an opening transaction. |
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Record date |
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The date on which a shareholder must own shares to receive a dividend or
right. |
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Redeemable |
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Preferred shares or bonds that give the issuing corporation an option to
repurchase securities at a stated price. These are also known as callable
securities. |
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Red herring |
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A preliminary prospectus with certain information printed in red ink around
the border of the front page. |
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Refinancing or refunding |
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Occurs when new debt securities are sold by a government or a company and
the money is used to pay off existing loans. |
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Registered Education Savings Plan (RESP) |
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A plan that enables a contributor, on a tax deferral basis, to accumulate
assets on behalf of a beneficiary to pay for a post-secondary education.
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Registered Retirement Income Fund (RRIF) |
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A maturity option available for RRSP assets to provide a stream of income
at retirement. |
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Registered Retirement Savings Plan (RRSP) |
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A tax-deferred retirement plan that allows individuals who have not reached
the age of 71 to set aside sums of money, within given limits. These sums
are deductible from taxable income and can compound on a tax-free basis.
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Repo or repurchase agreement |
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An agreement between a seller and a buyer in which the seller agrees to
buy back the security at a later date. |
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Retained earnings |
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The accumulated profits of a company. These may or may not be reinvested
in the business. |
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Retractable |
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Bonds or preferred shares that allow the holder to require the issuer to
redeem the security before the maturity date. |
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Reversal/Reverse conversion |
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An investment strategy used by professional option traders in which a short
put and a long call with the same strike price and expiration date are combined
with short position in the underlying security to lock in a nearly riskless
profit. For example, selling short 100 shares of XYZ stock, buying 1 XYZ
May 60 call, and writing 1 XYZ May 60 put at favourable prices. The process
of executing these three-sided trades is sometimes called "reversal
arbitrage." (See also Conversion.) |
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Reverse split |
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Occurs when a greater number of a company’s shares is exchanged for a fewer
number, resulting in a higher share price. |
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RHO |
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A measure of the expected change in an option's theoretical value for a
1 percent change in interest rates. |
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Right |
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An asset granting the temporary privilege of purchasing additional shares
directly from the company at a stated price to existing shareholders.
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Risk |
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The possibility of loss; the uncertainty of future returns. |
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Risk averse |
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Descriptive term used for an investor unable or unwilling to accept the
probability of losing capital. |
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Risk tolerance |
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Descriptive term used for an investor willing and able to accept the probability
or chance of losing capital. |
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Rolling |
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A trading action in which the investor simultaneously closes an open derivatives
position and creates a new position on the same derivative instrument. |
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