Financial and Investment Glossary
Financial Dictionary
Real Estate Investment Trust (REIT)
A fund that holds real estate or mortgages. REITs issue shares that trade on stock exchanges like shares of common stock.
Realized and Unrealized Gains
A gain is realized when an investment is sold. An investment that has increased in value, but has not yet been sold, has an "unrealized" gain.
Redemption Fee
To promote long-term investing and keep out quick-trading market timers, some mutual funds impose a redemption fee if you decide to sell shares less than a year or so after your initial investment. Redemption fees typically range between 1% and 2%.
Regional Fund
An international mutual fund that invests in securities from one particular area, such as Latin America or the Far East.
Rehabilitation Benefits
Insurance benefits covering a portion of the cost of retraining and rehabilitating a disabled wage earner (as a result of a covered auto accident) to return to work.
Renewal
A renewal is a new policy or a standard certificate from an insurance company, stating that the conditions of your old policy will stay in effect for a specified period of time.
Return
The profit earned on an investment, usually expressed as an annual percentage rate.
Return of Capital
Money paid to you as total or partial repayment of the money you invested. Return of capital differs from a sale in that you are not the one who initiates the return of capital.
Return On Assets (ROA)
The amount of profits earned (before interest and taxes), expressed as a percentage of total assets. This is a widely followed measure of profitability, thus the higher the number the better.
Return On Equity (ROE)
A percentage that indicates how well common stockholders' invested money is being used. The percentage is the result of dividing net earnings by common stockholders' equity. The ROE is used for measuring growth and profitability.
Return On Investment (ROI)
A measure of how well a company's management is performing. ROI is calculated by dividing earnings by total assets. It is a broader measure than return on equity (ROE) because assets include debt as well as equity.
Revenue
The dollar amount of annual sales, net of allowances (discounts, returned merchandise). It is the amount from which costs are subtracted to determine net income.
Revenue Growth
A useful measure of how fast a company's business is expanding.
Revenue Per Employee
A company's total revenue divided by the number of its employees. In general, the higher the number, the more efficient the company uses its employees.
Reverse Split
A reduction in the number of shares of stock. The opposite of a stock split, a reverse split means that shareholders will hold fewer shares although the value of their investment remains the same.
Risk
The chance of injury, damage or loss.
Risk-Adjusted Performance
A method of evaluating and comparing mutual funds. It takes the performance of the fund and factors in the risk level (or volatility) of the stocks and bonds in which the fund is invested.
Rollover
Transfer of funds from one tax-deferred retirement savings plan to another. Once a year you are allowed to take your money out of one IRA tax-free and put it into another.
Roth IRA
A tax-deferred retirement account. Unlike a traditional IRA, contributions to a Roth IRA aren't tax-deductible, but there is no tax on withdrawals as long as the taxpayer is age 59
Rule 12b-1 Fee
An annual charge, typically expressed as a percentage of average net assets, deducted from fund assets to pay for distribution and marketing costs. Rule 12b-1 fees typically consist of "distribution" fees, which compensate salespersons for selling fund shares, and "service" fees, which compensate salespersons for providing ongoing shareholder-liaison services such as responding to customer inquiries and providing information on investments.
Rule 144
An SEC rule specifying the conditions under which a holder of unregistered securities may publicly sell them without filing a formal registration statement.
A fund that holds real estate or mortgages. REITs issue shares that trade on stock exchanges like shares of common stock.
Realized and Unrealized Gains
A gain is realized when an investment is sold. An investment that has increased in value, but has not yet been sold, has an "unrealized" gain.
Redemption Fee
To promote long-term investing and keep out quick-trading market timers, some mutual funds impose a redemption fee if you decide to sell shares less than a year or so after your initial investment. Redemption fees typically range between 1% and 2%.
Regional Fund
An international mutual fund that invests in securities from one particular area, such as Latin America or the Far East.
Rehabilitation Benefits
Insurance benefits covering a portion of the cost of retraining and rehabilitating a disabled wage earner (as a result of a covered auto accident) to return to work.
Renewal
A renewal is a new policy or a standard certificate from an insurance company, stating that the conditions of your old policy will stay in effect for a specified period of time.
Return
The profit earned on an investment, usually expressed as an annual percentage rate.
Return of Capital
Money paid to you as total or partial repayment of the money you invested. Return of capital differs from a sale in that you are not the one who initiates the return of capital.
Return On Assets (ROA)
The amount of profits earned (before interest and taxes), expressed as a percentage of total assets. This is a widely followed measure of profitability, thus the higher the number the better.
Return On Equity (ROE)
A percentage that indicates how well common stockholders' invested money is being used. The percentage is the result of dividing net earnings by common stockholders' equity. The ROE is used for measuring growth and profitability.
Return On Investment (ROI)
A measure of how well a company's management is performing. ROI is calculated by dividing earnings by total assets. It is a broader measure than return on equity (ROE) because assets include debt as well as equity.
Revenue
The dollar amount of annual sales, net of allowances (discounts, returned merchandise). It is the amount from which costs are subtracted to determine net income.
Revenue Growth
A useful measure of how fast a company's business is expanding.
Revenue Per Employee
A company's total revenue divided by the number of its employees. In general, the higher the number, the more efficient the company uses its employees.
Reverse Split
A reduction in the number of shares of stock. The opposite of a stock split, a reverse split means that shareholders will hold fewer shares although the value of their investment remains the same.
Risk
The chance of injury, damage or loss.
Risk-Adjusted Performance
A method of evaluating and comparing mutual funds. It takes the performance of the fund and factors in the risk level (or volatility) of the stocks and bonds in which the fund is invested.
Rollover
Transfer of funds from one tax-deferred retirement savings plan to another. Once a year you are allowed to take your money out of one IRA tax-free and put it into another.
Roth IRA
A tax-deferred retirement account. Unlike a traditional IRA, contributions to a Roth IRA aren't tax-deductible, but there is no tax on withdrawals as long as the taxpayer is age 59
Rule 12b-1 Fee
An annual charge, typically expressed as a percentage of average net assets, deducted from fund assets to pay for distribution and marketing costs. Rule 12b-1 fees typically consist of "distribution" fees, which compensate salespersons for selling fund shares, and "service" fees, which compensate salespersons for providing ongoing shareholder-liaison services such as responding to customer inquiries and providing information on investments.
Rule 144
An SEC rule specifying the conditions under which a holder of unregistered securities may publicly sell them without filing a formal registration statement.