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Appendix B. <br /> Glossary of Technical Terms <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 /> 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 /> Certificate of Deposit (CD) — A time deposit with a specific maturity date and specific interest <br /> rate as evidenced by a certificate. <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 /> Commercial Paper — Negotiable short-term promissory notes issued by larger, well -known <br /> corporations. <br /> Dealer — A dealer, as opposed to a broker, acts as a principal in all transactions, buying and <br /> selling for its account. <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 /> Federal Deposit Insurance Corporation (FDIC) — A federal agency that insures bank deposits <br /> — currently up to $100,000 per deposit. <br /> Federal Farm Credit Bank (FFCB) — A federal government sponsored bank that provides <br /> loans and letters of credit that support United States agriculture. <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 /> Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac ") — A federal <br /> corporation that provides low cost residential mortgage funds to qualified borrowers. <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 /> 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 /> Page 10 of 12 <br />