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A brisk rise in the general price level of the market or in an individual stock.
Random Walk Theory
The theory that stock price movements are random and bear no relationship to past movements.
Rate of Return
School of economic theory which argues that investors are rational thinkers and can make intelligent economic decisions after evaluating all available information.
Real Estate Investment Trust (REIT)
An investment trust that specializes in real estate related investments including mortgages, construction loans, land and real estate securities in varying combinations. A REIT invests in and manages a diversified portfolio of real estate.
Gross Domestic Product adjusted for changes in the price level. Also referred to as constant dollar GDP.
Real Interest Rate
The nominal rate of interest minus the percentage change in the Consumer Price Index (i.e., the rate of inflation).
The date on which a shareholder must officially own shares in a company to be entitled to a declared dividend. Also referred to as the date of record.
Red Herring Prospectus
A preliminary prospectus so called because certain information is printed in red ink around the border of the front page. It does not contain all the information found in the final prospectus. Its purpose: to ascertain the extent of public interest in an issue while it is being reviewed by a securities commission.
The purchase of securities by the issuer at a time and price stipulated in the terms of the securities. See also Call Feature.
The price at which debt securities or preferred shares may be redeemed, at the option of the issuing company.
An open-market cash management policy pursued by the Bank of Canada. A redeposit refers to the transfer of funds from the Bank to the direct clearers (an injection of balances) that will increase available funds. See also Drawdown.
Registered Education Savings Plans (RESPs)
A type of government sponsored savings plan used to finance a child's post secondary education.
Registered Pension Plan (RPP)
A trust registered with Canada Revenue Agency and established by an employer to provide pension benefits for employees when they retire. Both employer and employee may contribute to the plan and contributions are tax-deductible. See also Defined Contribution Plan and Defined Benefit Plan.
Registered Retirement Income Fund (RRIF)
A tax deferral vehicle available to RRSP holders. The planholder invests the funds in the RRIF and must withdraw a certain amount each year. Income tax would be due on the funds when withdrawn.
Registered Retirement Savings Plan (RRSP)
An investment vehicle available to individuals to defer tax on a specified amount of money to be used for retirement. The holder invests money in one or more of a variety of investment vehicles which are held in trust under the plan. Income tax on contributions and earnings within the plan is deferred until the money is withdrawn at retirement. RRSPs can be transferred into Registered Retirement Income Funds upon retirement.
A security recorded on the books of a company in the name of the owner. It can be transferred only when the Certificate is endorsed by the registered owner. Registered debt securities may be registered as to principal only or fully registered. In the latter case, interest is paid by cheque rather than by coupons attached to the Certificate. See also Bearer Security.
Usually a trust company appointed by a company to monitor the issuing of common or preferred shares. When a transaction occurs, the registrar receives both the old cancelled Certificate and the new Certificate from the transfer agent and records and signs the new Certificate. The registrar is, in effect, an auditor checking on the accuracy of the work of the transfer agent, although in most cases the registrar and transfer agent are the same trust company.
The date a securities trade settles – i.e., the date the seller must deliver the securities. See also Settlement Date.
A term that indicates the amount a company usually pays on an annual basis.
The risk that interest rates will fall causing the cash flows on an investment, assuming that the cash flows are reinvested, to earn less than the original investment. For example, yield to maturity assumes that all interest payments received can be reinvested at the yield to maturity rate. This is not necessarily true. If interest rates in the market fall the interest would be reinvested at a lower rate. Reinvestment risk recognizes this risk.
Relative Strength Graph
Shows the relative strength of a stock compared to the action of the market as a whole. The price of the stock is calculated as a ratio of some market performance series such as the Dow Jones Industrial Average.
Relative Value Hedge Funds
A type of hedge fund that attempts to profit by exploiting irregularities or discrepancies in the pricing of related stocks, bonds or derivatives.
Usually, a corporation that has issued or has outstanding securities that are held by the public and is subject to continuous disclosure requirements of securities administrators.
An amount set aside from retained earnings to provide for the payment of contingencies, retirement of preferred stock, or other necessary payouts.
A contract provision which allows the segregated fund contract holder to lock in the current market value of the fund and set a new maturity date 10 years after the reset date. Depending on the contract, the reset dates may be chosen by the contract holder or be triggered automatically.
The opposite of a support level. A price level at which the security begins to fall as the number of sellers exceeds the number of buyers of the security.
Shares that participate in a company's earnings and assets (in liquidation), as common shares do, but generally have restrictions on voting rights or else no voting rights.
Individual investors who buy and sell securities for their own personal accounts, and not for another company or organization. They generally buy in smaller quantities than larger institutional investors.
The cumulative total of annual earnings retained by a company after payment of all expenses and dividends. The earnings retained each year are reinvested in the business.
Retained Earnings Statement
A financial statement that shows the profit or loss in a company's most recent year.
A feature which can be included in a new debt or preferred issue, granting the holder the option under specified conditions to redeem the security on a stated date – prior to maturity in the case of a bond.
The prediction of rates of return for each of the three major asset classes as part of the asset allocation process.
Return on Equity
A profitability ratio expressed as a percentage representing the amount earned on a company's common shares. Return on equity tells the investor how effectively their money is being put to use.
Return on Invested Capital
A profitability ratio that shows the amount earned on a company's total capital – the sum of its common and preferred shares and long-term debt. It is a useful measure of management efficiency.
Formations that usually precede a sizeable advance or decline in stock prices.
A process of retiring old shares with fewer shares. For example, an investor owns 1,000 shares of ABC Inc. pre split. A 10 for 1 reverse split or consolidation reduces the number held to 100. Results in a higher share price and fewer shares outstanding.
A beneficiary whose entitlements under the segregated fund contract can be terminated or changed without his or her consent.
A short-term privilege granted to a company's common shareholders to purchase additional common shares, usually at a discount, from the company itself, at a stated price and within a specified time period. Rights of listed companies trade on stock exchanges from the ex-rights date until their expiry.
Right of Action for Damages
Most securities legislation provides that those who sign a prospectus may be liable for damages if the prospectus contains a misrepresentation. This right extends to experts e.g., lawyers, auditors, geologists, etc., who report or give opinions within the text of the document.
Right of Redemption
A mutual fund's shareholders have a continuing right to withdraw their investment in the fund simply by submitting their shares to the fund itself and receiving in return the dollar amount of their net asset value. This characteristic is the hallmark of mutual funds. Payment for the securities that have been redeemed must be made by the fund within three business days from the determination of the net asset value.
Right of Rescission
The right of a purchaser of a new issue to rescind the purchase contract within the applicable time limits if the prospectus contained an untrue statement or omitted a material fact.
Right of Withdrawal
The right of a purchaser of a new issue to withdraw from the purchase agreement within two business days after receiving the prospectus.
Descriptive term used for an investor unable or unwilling to accept the probability or chance of losing capital. See also Risk-Tolerant.
The rate of return an investor would receive if he or she invested in a risk free investment, such as a treasury bill.
A rate that has to be paid in addition to the risk free rate (T-bill rate) to compensate investors for choosing securities that have more risk than T-Bills.
Descriptive term used for an investor willing and able to accept the probability of losing capital. See also Risk-Averse.