R-SQUARED

The degree to which an asset's correlation with "the market" has explained its fluctuations over a specified period of time. Alpha and beta coefficients are calculated using a procedure known as "regression analysis," where points in a system of coordinates are generated by measuring "market" movements (the "independent variable") along the horizontal "X" axis and correlating them with movements in the asset (the "dependent variable") measured along the vertical "Y" axis.

If the plot points clearly defines a straight line, the model will have an R-squared value of close to 1.0, meaning that fluctuations in the market explain close to 100% of the relative volatility in the asset.

If the pattern of plot points is largely random, the R-squared value will be near zero, meaning that fluctuations in the market explain virtually nothing about fluctuations in the asset.

REAL ESTATE FUND

A fund that invests primarily in stocks of companies that participate in the real estate industry, such as mortgages and real estate investment trusts, but not real estate itself.

REAL RETURN

The actual return earned on an investment after factoring in the rate of inflation.

RECORD DATE

The date on which a shareholder must officially own a stock's shares in order to receive a company's declared dividend or to vote on company issues.

REDEEM

To cash in shares by selling them back to the mutual fund. Mutual fund shares are redeemable on any business day.

REDEMPTION FEE

A fee charged by some funds when shares are sold (redeemed).

REDEMPTION PRICE

The price at which a mutual fund's shares are redeemed (bought back) by the fund. The value of the shares depends on the market value of the fund's portfolio of securities at the time. This value is the same as "net asset value per share." In the newspaper, this amount is shown as the "bid" price.

REINSTATEMENT PRIVILEGE

A shareholder who redeems fund shares, and then changes his or her mind, may have a onetime privilege of reinstating the investment by investing the proceeds of the redemption at net asset value (with no sales charge). There is generally a 30-day time limit for this service.

REPURCHASE AGREEMENT (REPO)

A contract under which an investor sells a United States security to a bank or Corporation, and agrees to repurchase the security later at a specified time and price. Purchaser earns interest competitive with money market rates.

REVENUE BOND

A municipal bond used to finance public works such as bridges, tunnels, or sewers. Principal and interest on the bond are paid directly from the revenues of the project, such as tolls. (Opposite: G.O., or General Obligation Bond, which relies on the taxpayers of a municipality to repay the debt.)

RIGHT OF ACCUMULATION (ROA)

A right granted by some mutual funds that allows a shareholder to count existing holdings of the fund along with new purchases in determining the size of the sales fee on the new shares. This right applies to funds that offer discounts on high-volume investments. Thus the fee charged on succeeding purchases is determined by all purchases, past and present, not just by new purchases.

ROA Right of Accumulation.

A right granted by some mutual funds that allows a shareholder to count existing holdings of the fund along with new purchases in determining the size of the sales fee on the new shares. This right applies to funds that offer discounts on high-volume investments. Thus the fee charged on succeeding purchases is determined by all purchases, past and present, not just by new purchases.

ROLLOVER

The reinvestment of funds into another, often similar, investment. Often used when securities are maturing, or when moving an Individual Retirement Account

RUSSELL 2000

A commonly cited index of small-cap stocks.

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