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San Leandro Investment Policy Statement Page 14 of 14 Appendix B (continued) Glossary of Technical Terms Liquidity —A measure of how easily an asset can be converted to cash with minimal loss of value. Securities issued by the U.S government and its agencies are highly liquid because they have established and active markets. Local Agency Investment Fund (LAIF) — A pooled investment fund maintained by the California State Treasurer consisting of deposits from the State and from California political subdivisions. Market Benchmark Index — A performance benchmark is a partial market index (a subset of the overall market) which reflects the mix of securities allowed under a specific investment policy. Maturity — The date that the principal or stated value of an investment becomes due and payable. Money Market — The market where short-term debt securities such as treasury bills, commercial paper and banker's acceptances are issued and traded. Portfolio — A collection of assets (securities, real property, buildings, etc.) held by an investor. Primary Dealer — A group of government securities dealers subject to the informal oversight of the Federal Reserve Bank of New York. Primary Market - The market where investment securities are purchased and sold when they are first issued. Prudent Investor Standard or Prudent Person Rule — An investment standard that requires an investor having trustee or fiduciary responsibility to select securities that would be bought by a prudent person of discretion and intelligence who is seeking capital preservation and a reasonable income. Repurchase Agreement ("Repo") — An investment transaction where the holder of securities sells the securities to an investor with an agreement to repurchase them for a fixed price on a fixed date. In effect, the buyer lends the seller money for the term of the agreement and the agreement is structured to compensate the buyer for this. Reverse Repurchase Agreement ("Reverse Repo") —An investment transaction where an investor buys securities from another investor with an agreement to resell them for a fixed price on a fixed date. Safekeeping — A service provided by banks and other financial institutions whereby securities and/or collateral are held for protection and safety.