Super Finance Glossary
Over 10,000 financial glossary terms...
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Redemption Charge
Definition: The commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. This charge may decline or be eliminated as shares are held for longer time periods.
Definition: The commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. This charge may decline or be eliminated as shares are held for longer time periods.
Redemption Cushion
Definition: The percentage by which the conversion value of a convertible security exceeds the redemption price (strike price).
Definition: The percentage by which the conversion value of a convertible security exceeds the redemption price (strike price).
Redemption Fee
Definition: A fee some mutual funds charge when an investor sells shares within a specified short period of time.
Definition: A fee some mutual funds charge when an investor sells shares within a specified short period of time.
Redemption Or Call
Definition: Right of the issuer to force holders on a certain date to redeem their convertibles for cash. The objective usually is to force holders to convert into common prior to the redemption deadline. Typically, an issue is not called away unless the conversion price is 15%-25% below the current level of the common. An exception might occur when an issuer's tax rate is high, and the issuer could replace it with debt securities at a lower after-tax cost.
Definition: Right of the issuer to force holders on a certain date to redeem their convertibles for cash. The objective usually is to force holders to convert into common prior to the redemption deadline. Typically, an issue is not called away unless the conversion price is 15%-25% below the current level of the common. An exception might occur when an issuer's tax rate is high, and the issuer could replace it with debt securities at a lower after-tax cost.
Rediscount
Definition: To discount short-term negotiable debt instruments for a second time, after they have been discounted with a bank.
Definition: To discount short-term negotiable debt instruments for a second time, after they have been discounted with a bank.
Reduction-Option Loan (ROL)
Definition: A hybrid of a fixed-rate and adjustable-rate mortgage. An ROL matches the borrower to the current mortgage rate, which then becomes fixed for the rest of the term. This reduction is usually allowed if rates drop more than 2% in a year.
Definition: A hybrid of a fixed-rate and adjustable-rate mortgage. An ROL matches the borrower to the current mortgage rate, which then becomes fixed for the rest of the term. This reduction is usually allowed if rates drop more than 2% in a year.
Reference Asset
Definition: An asset, such as a corporate or sovereign debt instrument, that underlies a credit derivative.
Definition: An asset, such as a corporate or sovereign debt instrument, that underlies a credit derivative.
Reference Rate
Definition: A benchmark interest rate (such as LIBOR) used to specify conditions of an interest rate swap or an interest rate agreement.
Definition: A benchmark interest rate (such as LIBOR) used to specify conditions of an interest rate swap or an interest rate agreement.
Refund
Definition: To retire existing bond issues through the sale of a new bond issue, usually to reduce the interest rate being paid.
Definition: To retire existing bond issues through the sale of a new bond issue, usually to reduce the interest rate being paid.
Refunded Bond
Definition: Also called a prerefunded bond, a bond that originally may have been issued as a general obligation or revenue bond but that is now secured by an escrow fund consisting entirely of direct U.S. government obligations that are sufficient for paying the bondholders.
Definition: Also called a prerefunded bond, a bond that originally may have been issued as a general obligation or revenue bond but that is now secured by an escrow fund consisting entirely of direct U.S. government obligations that are sufficient for paying the bondholders.
Refunding
Definition: Redeeming a bond with proceeds received from issuing lower-cost debt obligations with ranking equal to or superior to the debt to be redeemed.
Definition: Redeeming a bond with proceeds received from issuing lower-cost debt obligations with ranking equal to or superior to the debt to be redeemed.
Refunding Escrow Deposits (REDs)
Definition: A financial instrument involving a forward purchase contract that obligates investors to buy bonds at a certain rate when issued. The future date coincides with the first optional call date on an existing high-rate bond. In the interim, investors' money is invested in secondary market Treasury bonds. The Treasuries mature around the call date on the existing bonds, providing the money to buy the new issue and redeem the old one.
Definition: A financial instrument involving a forward purchase contract that obligates investors to buy bonds at a certain rate when issued. The future date coincides with the first optional call date on an existing high-rate bond. In the interim, investors' money is invested in secondary market Treasury bonds. The Treasuries mature around the call date on the existing bonds, providing the money to buy the new issue and redeem the old one.
Regional Bank
Definition: A bank operating in a specific region of the country, taking deposits and offering loans.
Definition: A bank operating in a specific region of the country, taking deposits and offering loans.
Regional Check Processing Center (RCPC)
Definition: A Federal Reserve check processing operation that clears checks drawn on depository institutions located within a specified area. RCPCs expedite collection and settlement of checks within the area on an overnight basis.
Definition: A Federal Reserve check processing operation that clears checks drawn on depository institutions located within a specified area. RCPCs expedite collection and settlement of checks within the area on an overnight basis.
Regional Fund
Definition: A mutual fund that invests in a specific geographic area overseas, such as Asia or Europe.
Definition: A mutual fund that invests in a specific geographic area overseas, such as Asia or Europe.
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