What is the 'Real Value' The real value is nominal value adjusted for inflation. The real value is obtained by removing the effect of price level changes from the nominal value of time-series data, so as to...
How to Calculate the Real Rate of Return on Your Investment
The real rate of return helps investors determine which investment offers a higher return without taking into account the impact of taxes or investment fees. By subtracting the nominal...
What is a 'Random Variable' A random variable is a variable whose value is unknown or a function that assigns values to each of an experiment's outcomes. Random variables are often designated by letters and can be...
What is a 'Rate Of Return'
A rate of return is the gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost. Gains on investments are defined as income received plus...
Definition
Rational pricing is the assumption in financial economics that asset prices will reflect the arbitrage-free price of the asset as any deviation from this price will be "arbitraged away". This assumption is useful in pricing fixed income securities, particularly...
What is 'Rate Of Change' The rate of change (ROC) is the speed at which a variable changes over a specific period of time. ROC is often used when speaking about momentum, and it can generally be...
What is ‘Re-Offer Price'
The term "re-offer price" refers to the price at which a financial institution offers a security that it has previously purchased. Re-offer price differs from the original purchase offer price, as it takes into account any...
What is rationing and why was it used during World War II
Rationing is a system of limiting the availability of goods or services to a particular group of people. Rationing is often used during times of war or other...
What is 'Rationalization'
Rationalization is a reorganization of a company in order to increase its efficiency. This reorganization may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy pertaining to particular...
What is 'Ratings Service' A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. Explaining 'Ratings Service' Ratings...