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San Leandro Investment Policy Statement Page 11 of 13 <br /> Appendix B <br /> Glossary of Technical Terms <br /> Banker's Acceptance (BA) - A draft or bill of exchange accepted by a bank or trust <br /> company. The accepting institution guarantees payment of the bill. <br /> Broker - A broker, as opposed to a dealer, brings buyers and sellers together in <br /> exchange for an agreed upon commission or fee. A broker is not a principal party to the <br /> transaction. <br /> Certificate of Deposit (CD) - A time deposit with a specific maturity date and specific <br /> interest rate as evidenced by a certificate. <br /> Collateral - Securities pledged by a bank or other financial institution to secure <br /> repurchase agreements, certificates of deposit and deposits of public monies. <br /> Commercial Paper - Negotiable short-term promissory notes issued by larger, well - <br /> known corporations. <br /> Dealer - A dealer, as opposed to a broker, acts as a principal in all transactions, buying <br /> and selling for its account. <br /> Delivery Versus Payment - a method of purchasing securities where the security is <br /> delivered to the safekeeping party in exchange for cash payment. <br /> Federal Deposit Insurance Corporation (FDIC) - A federal agency•that insures bank <br /> deposits — currently up to $100,000 per deposit. <br /> Federal Farm Credit Bank (FFCB) - A federal government sponsored bank that <br /> provides loans and letters of credit that support United States agriculture. <br /> Federal Home Loan Banks (FHLB) - Federal government sponsored wholesale banks <br /> that lend funds and provide banking services to member commercial banks, thrift <br /> institutions, credit 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 <br /> corporation working under the auspices of the U.S. Department of Housing and Urban <br /> Development (HUD). FNMA is the largest single provider of residential mortgage funds <br /> in the United States. <br /> Liquidity - A measure of how easily an asset can be converted to cash with minimal <br /> loss of value. Securities issued by the U.S government and its agencies are highly <br /> liquid because they have established and active markets. <br />