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
What Is a Regulated Investment Company (RIC) A regulated investment company (RIC) can be any one of several investment entities. For example, it may take the form of a mutual fund or exchange-traded fund (ETF), a real estate investment trust (REIT), or a unit investment trust (UIT). Whichever form the RIC assumes, the structure must
What Is Ricardian Equivalence? Ricardian equivalence is an economic theory that says that financing government spending out of current taxes or future taxes (and current deficits) will have equivalent effects on the overall economy. This means that attempts to stimulate an economy by increasing debt-financed government spending will not be effective because investors and consumers
What Is the Ricardo-Barro Effect? The Ricardo-Barro effect, also known as Ricardian equivalence, is an economic theory that suggests that when a government tries to stimulate an economy by increasing debt-financed government spending, demand remains unchanged, because the public increases their saving to pay for expected future tax increases that will be used to pay
What Is a Revenue Bond? A revenue bond is a category of municipal bond supported by the revenue from a specific project, such as a toll bridge, highway, or local stadium. Revenue bonds that finance income-producing projects are thus secured by a specified revenue source. Typically, revenue bonds can be issued by any government agency
What Is a Revenue Cap Regulation? Revenue cap regulation seeks to limit the amount of total revenue that can be earned by a firm operating in an industry with no or few other competitors. An industry such as this, where one or a few companies control the entire production and sale of a good or
What Is the Revenue Equalization Reserve Fund? The term Revenue Equalization Reserve Fund refers to a sovereign wealth fund set up by the government of Kiribati, an independent republic located in the Pacific Ocean. Kiribati is part of the group of islands known as Micronesia. The fund was established in 1956 when the nation was
What Is a Revenue Officer? A revenue officer is an employee of a government or a public agency who collects delinquent taxes or fees. The job is performed on a case-by-case basis and generally involves directly contacting individuals or businesses that are in arrears on payments. At the federal level, revenue officers are employed by
