Guide to Analysing Companies

Red herring
See pathfinder.
Redemption date
The date on which a security can be redeemed (that is, when
the principal can be repaid). This is not necessarily the same
as the maturity date. The security may have a fixed maturity
but also contain an option to call for repayment earlier. 
Redemption yield
The total yield on a fixed-income security which includes
the flat yield (the declared rate of interest) plus the discounted
present value of the future capital gain on the security. So a
government bond with a coupon of 3%, a face value of $100,
a market price of $50 and three years to maturity has a
current yield of 6%. Its redemption yield is 6% plus the dis-
counted present value of $50 that is to be gained in three years’
time.
Red lining
The allegedly once common practice by banks of putting a red
line around certain neighbourhoods or ghettos, and refusing to
lend to any borrower within that area. Red lining based on race
or racial mix is now illegal in most countries.
Refinancing
Paying off an existing debt with a new loan (which is
cheaper, bigger or has a longer maturity). As the rate of in-
terest falls, borrowers want to refinance debt taken out at a
fixed rate. When some sorts of projects are completed (such
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as a housing development or a major road), the existing debt
can be refinanced at keener rates because the risk of the project
not being completed on time has been lifted. In some cases,
banks impose penalties on the early repayment of debt. (See
also prepayment.)
Registered representative
A person in the United States registered with the sec to give
advice on what securities to buy and sell. Registered repre-
sentatives pass on a client’s orders to a broker (which may also
employ them) to be executed. In return, the registered represen-
tative receives a percentage of the brokerage commission.