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<br />San Leandro Investment Policy Statement <br /> <br />Page 10 of 12 <br /> <br />Appendix B. <br />Glossary of Technical Terms <br /> <br />Banker's Acceptance (BA) - A draft or bill of exchange accepted by a bank or trust company. <br />The accepting institution guarantees payment of the bill. <br /> <br />Broker - A broker, as opposed to a dealer, brings buyers and sellers together in exchange for an <br />agreed upon commission or fee. A broker is not a principal party to the transaction. <br /> <br />Certificate of Deposit (CD) ~ A time deposit with a specific maturity date and specific interest <br />rate as evidenced by a certificate. <br /> <br />Collateral - Securities pledged by a bank or other financial institution to secure repurchase <br />agreements, certificates of deposit and deposits of public monies. <br /> <br />Commercial Paper - Negotiable short-term promissory notes issued by larger, well-known <br />corporations. <br /> <br />Dealer - A dealer, as opposed to a broker, acts as a principal in all transactions, buying and <br />selling for its account. <br /> <br />Delivery Versus Payment - a method of purchasing securities where the security is delivered to <br />the safekeeping party in exchange for cash payment. <br /> <br />Federal Deposit Insurance Corporation (FDIC) - A federal agency that insures bank deposits <br />- currently up to $100,000 per deposit. <br /> <br />Federal Farm Credit Bank (FFCB) - A federal government sponsored bank that provides loans <br />and letters of credit that support United States agriculture. <br /> <br />Federal Home Loan Banks (FHLB) - Federal government sponsored wholesale banks that lend <br />funds and provide banking services to member commercial banks, thrift institutions, credit <br />unions and insurance companies. <br /> <br />Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac") - A federal <br />corporation that provides low cost residential mortgage funds to qualified borrowers. <br /> <br />Federal National Mortgage Association (FNMA or "Fannie Mae") - A federal corporation <br />working under the auspices of the U.S. Department of Housing and Urban Development (HUD). <br />FNMA is the largest single provider of residential mortgage funds in the United States. <br /> <br />Liquidity - A measure of how easily an asset can be converted to cash with minimal loss of <br />value. Securities issued by the U.S government and its agencies are highly liquid because they <br />have established and active markets. <br />