What Is a Revocable Trust? A revocable trust is a trust whereby provisions can be altered or canceled depending on the wishes of the grantor or the originator of the trust. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries of
What Is a Revolver? A revolver refers to a borrower—either an individual or a company—who carries a balance from month to month, via a revolving credit line. Borrowers are only obligated to make minimum monthly payments, which go toward paying interest and reducing principal debt. Revolvers are used in finance by corporations to fund working
What Is a Revolving Loan Facility? A revolving loan facility is a form of credit issued by a financial institution that provides the borrower with the ability to draw down or withdraw, repay, and withdraw again. A revolving loan is considered a flexible financing tool due to its repayment and re-borrowing accommodations. It is not
What Is Revenue Per Available Room (RevPAR)? Revenue per available room (RevPAR) is a metric used in the hospitality industry to measure hotel performance. The measurement is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. RevPAR is also calculated by dividing a hotel’s total room revenue by the total
What Was the Reconstruction Finance Corporation (RFC)? The Reconstruction Finance Corp. (RFC) was an agency authorized by the U.S. government to loan money to assist the nation’s ailing banks after the stock market crash of 1929 and during the Great Depression that followed. Congress created the RFC in 1932 with a limited mandate to issue emergency
What Is Recency, Frequency, Monetary Value (RFM)? Recency, frequency, monetary value (RFM) is a model used in marketing analysis that segments a company’s consumer base by their purchasing patterns or habits. In particular, it evaluates customers’ recency (how long ago they made a purchase), frequency (how often they make purchases), and monetary value (how much money
What Is the Risk-Free Rate Puzzle (RFRP)? The risk-free rate puzzle (RFRP) is a market anomaly observed in the persistent difference between the lower historic real returns of government bonds compared to equities. This puzzle is the inverse of the equity premium puzzle and looks at the disparity from the perspective of the lower returning
What Is Rho? Rho is the rate at which the price of a derivative changes relative to a change in the risk-free rate of interest. Rho measures the sensitivity of an option or options portfolio to a change in interest rate. Rho may also refer to the aggregated risk exposure to interest rate changes that
What Is a Registered Investment Advisor (RIA)? A registered investment advisor (RIA) is a firm that advises clients on securities investments and may manage their investment portfolios. RIAs are registered with either the U.S. Securities and Exchange Commission (SEC) or state securities administrators. RIAs have fiduciary obligations to their clients, meaning that they have a
What Is Riba? Riba is an Arabic word that means “to increase” or “to exceed” and is commonly used in reference to unequal exchanges or charges and fees for borrowing. Interest is deemed riba, or an unjust, exploitative gain, and such practice is forbidden under Islamic law. Key Takeaways In Islamic finance, riba refers to interest
