R
Real Interest Rates
Nominal interest rate adjusted for inflation.
Refined Products
The products derived from crude oil after being processed through an oil refinery.
Reforming Margins
The uplift obtained, usually expressed in cents per barrel, from reforming Naphtha into Gasoline
Reinvestment Risk
The risk that an asset manager will be unable to match the yield from an interest-rate instrument when reinvesting its coupon payments and principal repayments.
Replacement Cost
The replacement cost of a financial instrument is its current market value. In credit risk terms, it is the cost of replacing a given contract if the counter party defaults.
Replication
To replicate the payout of an option by buying or selling other instruments.
Repo Rate
The rate of interest in a repo transaction.
Repo Agreement
To buy (or sell) a security while at the same time agreeing to sell (or buy) the same security at a predetermined future date. The price of the second transaction determines the repo rate, the interest rate earned on the security between the two transactions. In a reverse repo the buyer sells cash in exchange for a security.
Reset Date
The date in a swap or cap or floor when the floating rate for the next period is set.
Rho
A measure of an option's sensitivity to a change in interest rates; this will impact on both the future price of the option, and the time value of the premium. Its impact increases with the maturity of the option.
Risk Management
Control and limitation of the risks faced by an organisation due to exposure to changes in financial market variables such as foreign exchange and interest rates, equity, commodity prices or counter party creditworthiness.
Risk Premium
Expected additional return for making a risky investment as opposed to a safe one.
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