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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Random variable

Random variable

Random variable

A function that assigns a real number to each and every possible outcome of a random experiment.

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RAMs (Reverse-annuity mortgages)

RAMs (Reverse-annuity mortgages)

RAMs (Reverse-annuity mortgages)

Mortgages in which the bank makes a loan for an amount equal to a percentage of the appraisal value of the home. The loan is then paid to the homeowner in the form of an annuity.

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Rally (recovery)

Rally (recovery)

Rally (recovery)

An upward movement of prices. Opposite of reaction.

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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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