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San Leandro Investment Policy Statement Page 12 of 13 <br /> <br /> <br />Appendix B (continued) <br />Glossary of Technical Terms <br /> <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 /> <br />Local Agency Investment Fund (LAIF) – A pooled investment fund maintained by the <br />California State Treasurer consisting of deposits from the State and from California <br />political subdivisions. <br /> <br />Market Benchmark Index – A performance benchmark is a partial market index (a <br />subset of the overall market) which reflects the mix of securities allowed under a <br />specific investment policy. <br /> <br />Maturity – The date that the principal or stated value of an investment becomes due <br />and payable. <br /> <br />Money Market – The market where short-term debt securities such as treasury bills, <br />commercial paper and banker’s acceptances are issued and traded. <br /> <br />Portfolio – A collection of assets (securities, real property, buildings, etc.) held by an <br />investor. <br /> <br />Primary Dealer – A group of government securities dealers subject to the informal <br />oversight of the Federal Reserve Bank of New York. <br /> <br />Primary Market - The market where investment securities are purchased and sold <br />when they are first issued. <br /> <br />Prudent Investor Standard or Prudent Person Rule – An investment standard that <br />requires an investor having trustee or fiduciary responsibility to select securities that <br />would be bought by a prudent person of discretion and intelligence who is seeking <br />capital preservation and a reasonable income. <br /> <br />Repurchase Agreement (“Repo”) – An investment transaction where the holder of <br />securities sells the securities to an investor with an agreement to repurchase them for a <br />fixed price on a fixed date. In effect, the buyer lends the seller money for the term of the <br />agreement and the agreement is structured to compensate the buyer for this. <br /> <br />Reverse Repurchase Agreement (“Reverse Repo”) – An investment transaction <br />where an investor buys securities from another investor with an agreement to resell <br />them for a fixed price on a fixed date. <br /> <br />Safekeeping – A service provided by banks and other financial institutions whereby <br />securities and/or collateral are held for protection and safety. <br />