ÍNDICE DE TABLAS Y GRÁFICOS DE LOS RESULTADOS ACADÉMICOS DE

Registered representatives are licensed to act on investors’ orders to buy and sell and to provide advice relevant to port- folio transactions.

They may be paid a salary, a commission, usually a percentage of the market price of the investments their clients buy and sell, or by annual fee figured as a percentage of the value of a client’s account.

Registered reps work for a broker- dealer that belongs to the exchange or operates in the market where the trades are handled. The reps must pass a series of exams administered by NASD to qualify for their licenses and are subject to NASD oversight.

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D

T

Z

Regressive tax

A regressive or flat income tax system taxes everyone at the same rate, as sales tax does.

Advocates say it’s simpler and does away with the kinds of tax breaks that tend to favor the wealthy. Opponents say that middle-income taxpayers carry too large a proportion of the total tax bill.

Regulation D

Both the Securities and Exchange Commission (SEC) and the Federal Reserve have regulations known as Regulation D.

The SEC’s Regulation D specifies which securities can be sold within the United States without having to be registered with the Commission.

Among the other restrictions, these securities can be made available only to accredited investors—individuals with a net worth of at least $1 million or an annual income of $200,000 or more, and institutions with assets of $5 million or more.

The Federal Reserve’s Regulation D sets the requirements for depositary institutions, including the amount of cash the bank must hold in reserve and the number of transfers or withdrawals permitted for a savings account—which is six transfers every four week cycle with no more than three by check or electronic payment.

Regulation T

Regulation T is the Federal Reserve Board rule that governs how much you can borrow through your margin account to cover the purchase price of a security. This initial margin is 50% of the total cost.

The New York Stock Exchange (NYSE) and NASD additionally require your account to have a minimum margin of $2,000 or the full cost of the purchase, whichever is less, at the time you trade, plus a maintenance margin of at least 25% of the total market value of the securities in your account at all times.

Individual broker-dealers may and often do require higher minimum and maintenance margins.

Regulation Z

Under Regulation Z, a Federal Reserve Board rule covering provisions of the Consumer Credit Protection Act of 1968, lenders have to tell you certain terms of the credit they’re offering, in writing, before you borrow.

Also known as the Truth in Lending Act, the regulation stipulates that lenders must disclose the true cost of loans. For example, they must make the interest rate, annual percentage rate (APR), and other terms of the loan simple to understand.

Regulation Z establishes uniform methods for calculating the cost of credit, disclosing credit terms, and resolving errors on certain types of credit accounts.

Rehypothecation

Rehypothecation occurs when your broker, to whom you have hypothecated— or pledged—securities as collateral for a margin loan, pledges those same securities to a bank or other lender to secure a loan to cover the firm’s exposure to potential margin account losses.

When you open a margin account, you typically sign a general account agreement with your broker, in which you authorize your broker to rehypothecate.

Reinvestment

When you own certain stocks and most mutual funds, you can reinvest the dividends or distributions to buy more shares instead of receiving a cash payout.

In a corporate Dividend Reinvestment Plan (DRIP), for example, a company offers you the right to reinvest any cash dividends automatically to buy more stock. When you open a mutual fund account, you’re generally offered an automatic reinvestment option as well.

One benefit of reinvestment programs is that in most cases you can make the new investments without incurring the usual sales charges, so it can be a lower cost way to build your investment portfolio.

One potential drawback, if you’re reinvesting in a taxable account, is that you acquire shares at different prices, so figuring the cost basis for capital gains or losses when you sell can be more complicated than if you made fewer, larger purchases. It’s also true that you owe income or capital gains tax in the year the money is reinvested, which isn’t the case in a tax-deferred or tax-free account.

You will also want to consider the impact of reinvestment on the diversification of your portfolio, since buying additional shares increases the percentage of your portfolio that is allocated to a particular stock or mutual fund.

Regressive tax

Reinvestment risk

Reinvestment risk occurs when you have money from a maturing fixed-income investment, such as a certificate of deposit (CD) or a bond, and want to make a new investment of the same type.

The risk is that you will not be able to find the same rate of return on your new investment as you were realizing on the old one. In fact, the return could be significantly lower, based on what’s happening in the economy at large, though it could also be higher.

For example, if a bond paying 6% interest matures when the current rate is 4%, you must settle for a lower return if you buy a new bond unless you’re willing to buy one of lower quality.

One way to limit reinvestment risk is by using an investment technique known as laddering, which means splitting your investment among a number of bonds or CDs that mature gradually over a series of years.

That way only part of your total investment will mature and have to be reinvested at any one time.

Renewable term

A renewable term life insurance policy allows you to extend your coverage for an additional period without having to requalify for coverage, provided that you have paid your premiums in full and on time.

Being able to renew your policy can be an important advantage if your health has declined since your original purchase. That’s because another insurer might refuse to sell you a policy or might charge more for comparable coverage.

Renewable term policies do not guarantee the same rate for the new coverage period. In fact, at each renewal, the cost is likely to increase to reflect the fact that you’re older and therefore pose a greater risk to the insurer.

Required beginning date (RBD)

Your required beginning date is the date by which you must take your first minimum required distribution from

retirement savings plans that require distributions.

For an individual retirement account (IRA), it’s April 1 of the year following the year you turn 70½. For a 401(k), it’s either the April 1 of the year following the year you turn 70½ or the April 1 following the year you retire, unless you own 5% or more of the company sponsoring the plan. If that’s the case, your deadline is April 1 of the year after the year you turn 70½.

Reserve requirement

The Federal Reserve requires its member banks to keep a certain percentage of their customer deposits in cash and other liquid assets in reserve at all times.

The required percentage may be revised at the Fed’s discretion, but it has not been changed in recent years.

When a bank finds itself with excess reserves, it can lend them to other banks that may need them. These very short- term loans are known as federal funds and the interest rate the lenders charge is called the federal funds rate. That’s also the benchmark rate for many corporate and international government loans.