Rate anticipation swaps

Rate anticipation swaps

Rate anticipation swaps

An exchange of bonds in a portfolio for new bonds that will achieve the target portfolio duration, based on the investor’s assumptions about future changes in interest rates.

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Range forward

Range forward

Range forward

A forward exchange rate contract that places upper and lower bounds on the cost of foreign exchange.

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Randomized strategy

Randomized strategy

Randomized strategy

A strategy of introducing into the decision-making process a random element that is designed to reduce the information content of the decision-maker’s observed choices.

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Random walk

Random walk

Random walk

Theory that stock price changes from day to day are at random; the changes are independent of each other and have the same probability distribution. Many believers of the random walk theory believe that it is impossible to outperform the market consistently without taking additional risk.

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R squared (R2)

R squared (R2)

R squared (R2)

Square of the correlation coefficient proportion of the variability explained by the linear regression model. For example, an r squared of 75% means that 75% of the variability observed in the dependent variable is explained by the independent variable.

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