Laserfiche WebLink
<br /> <br />Consulting Services Agreement between City of San Leandro and 7/1/2021 <br />Chandler Asset Management for Investment Services Exhibit F – Page 15 of 19 <br /> <br />CURRENT YIELD. The annual income from an investment divided by the current market value. <br />Since the mathematical calculation relies on the current market value rather than the <br />investor’s cost, current yield is unrelated to the actual return the investor will earn if the <br />security is held to maturity. <br /> <br />DEALER. A dealer acts as a principal in security transactions, selling securities from and buying <br />securities for his own position. <br /> <br />DEBENTURE. A bond secured only by the general credit of the issuer. <br /> <br />DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security <br />must be made at the time the security is delivered to the purchaser’s agent. <br /> <br />DERIVATIVE. Any security that has principal and/or interest payments which are subject to <br />uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any <br />security which represents a component of another security which has been separated from <br />other components (“Stripped” coupons and principal). A derivative is also defined as a <br />financial instrument the value of which is totally or partially derived from the value of <br />another instrument, interest rate, or index. <br /> <br />DISCOUNT. The difference between the par value of a bond and the cost of the bond, when the cost <br />is below par. Some short-term securities, such as T-bills and banker’s acceptances, are <br />known as discount securities. They sell at a discount from par, and return the par value to <br />the investor at maturity without additional interest. Other securities, which have fixed <br />coupons, trade at a discount when the coupon rate is lower than the current market rate for <br />securities of that maturity and/or quality. <br /> <br />DIVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive <br />exposure to any one source of risk. <br /> <br />DURATION. The weighted average time to maturity of a bond where the weights are the present <br />values of the future cash flows. Duration measures the price sensitivity of a bond to changes <br />in interest rates. (See modified duration). <br /> <br />FEDERAL FUNDS RATE. The rate of interest charged by banks for short-term loans to other banks. <br />The Federal Reserve Bank through open-market operations establishes it. <br /> <br />FEDERAL OPEN MARKET COMMITTEE. A committee of the Federal Reserve Board that <br />establishes monetary policy and executes it through temporary and permanent changes to <br />the supply of bank reserves. <br /> <br />LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings <br />at a rate higher than the cost of borrowing. <br /> <br />LIQUIDITY. The speed and ease with which an asset can be converted to cash. <br />156