Random Walk Theory
What is the 'Random Walk Theory' The random walk theory suggests that stock price changes have the same distribution and are independent of each other, so the past movement or trend of a stock price or market cannot be used to predict its future movement. In short, this is the idea that stocks take a random and unpredictable path. Explaining 'Random...
Rational Behavior
What is 'Rational Behavior' A rational behavior decision-making process is based on making choices that result in the most optimal level of benefit or utility for the individual. Most conventional economic theories are created and used under the assumption all individuals taking part in an action/activity are behaving rationally. Rational behavior does not necessarily always involve receiving...
Real Estate Mortgage Investment Conduits (REMIC)
Home Ownership by Country Real Estate Mortgage Investment Conduits (REMIC) What is 'Real Estate Mortgage Investment Conduits - REMIC' A complex pool of mortgage securities created for the purpose of acquiring collateral. This base is then divided into varying classes of securities backed by mortgages with different maturities and coupons. Explaining 'Real Estate Mortgage Investment...
Rational Expectations Theory
DefinitionIn economics, "rational expectations" are model-consistent expectations, in that agents inside the model are assumed to "know the model" and on average take the model's predictions as valid. Rational expectations ensure internal consistency in models involving uncertainty. To obtain consistency within a model, the predictions of future values of economically relevant variables from the model are assumed to be...
Real Estate Agent
DefinitionA real estate broker or real estate salesperson is a person who acts as an intermediary between sellers & buyers of real estate/real property. Their mission is to complete a transaction between the buyer and seller. Real Estate Agent What is a 'Real Estate Agent' Real estate agents are licensed professionals who represent buyers and sellers in...
Real Estate Mortgage Investment Conduit (REMIC)
Home Ownership by Country Real Estate Mortgage Investment Conduit (REMIC) What is 'Real Estate Mortgage Investment Conduit - REMIC' A special purpose vehicle (SPV) that is used to pool mortgage loans and issue mortgage-backed securities (MBS). Real estate mortgage investment conduits (REMIC) hold commercial and residential mortgages in trust, and issue interests in these mortgages to investors....
Rate Level Risk
What is 'Rate Level Risk' A type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time. Although interest rates are expected to fluctuate over the period of an investment, the probability of an interest rate change is not always constant, nor is...
Return on Investment
DefinitionReturn on investment is the ratio between the net profit and cost of investment resulting from an investment of some resource. A high ROI means the investment's gains compare favorably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments. In purely economic...
Random Factor Analysis
What is 'Random Factor Analysis' A statistical analysis performed to determine the origin of random data figures collected. Random factor analysis is used to decipher whether the outlying data is caused by an underlying trend or just simply random occurring events and attempts to explain the apparently random data. It uses multiple variables to more accurately interpret...
Real Time
What is 'Real Time' When a system relays information to a user at a speed that is near instantaneous or has a short delay from when the event actually occurred. Online brokerages often provide a real-time data feed that displays stock quotes and their respective real-time changes, with a very insignificant lag time, so that clients can...