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Real Interest Rate
An interest rate which has been adjusted for inflation, or the actual interest rate less the current rate of inflation.
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Real Return
A return that has been adjusted for inflation.
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Recognised Investment Exchange (RIE)
An exchange authorised to operate in the UK. The FSA requires that all UK exchanges are recognised.
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Redemption
Repayment of a debt security or preference share, at or before maturity. The amount payable on redemption is usually specified on issue.
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Redemption Yield
The total annualised return on owning a fixed interest security, made up of annual income plus any gain or minus any loss to redemption.
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Registered Bond
A bond registered in the name of the owner or his nominee and payable only to that owner, as opposed to a bearer bond. The bond is registered with the issuing company or its registrar.
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Registrar
An organisation responsible for maintaining a company's shareholder register.
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Repo
An agreement to sell a security and buy it back at an agreed price. Repos are often used in the gilt market.
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Resolution
A proposal on which shareholders vote at a company meeting. Resolutions can be either ordinary or special.
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Retail Price Index (RPI)
An index used to gauge the general change in prices over time. It is used to measure inflation in the UK economy. It is based on a basket of goods and services purchased by average households.
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Return of Capital
A return from an investment that is not considered income. The return of capital is when some or all of the money an investor has in an investment is paid back to him or her, thus decreasing the value of the investment. This is not a gain of any type because it is not in excess of the original investment.
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Reverse Yield Gap
The difference between the average annual yield on long-dated Gilts and the average dividend yield on UK equities. Until 1959 yields obtained from UK equities usually exceeded the yields provided by longdated UK Gilts, reflecting the historic view that shares were a more risky investment; this relationship has subsequently reversed.
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Rights Issue
A new issue of shares to existing shareholders usually at a discount to the prevailing market price.
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Risk
The chance that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original investment. Risk is usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment.
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Risk Warning
A warning which must be acknowledged by a client prior to dealing.
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Rolling Settlement
The system of setting transactions on a fixed number of days after the trade date. Standard settlement in the UK is T + 3 which means that bargains are due for settlement 3 business days after the trade. However, it is possible to deal for settlement T + 20.
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Round trip
The opening purchase (sale) of an option and the subsequent opposite and closing transaction in the same contract. Transaction costs are often quoted on a round trip basis.
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Running Yield
(See Current Yield)