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<br />I <br /> <br />I <br /> <br />I <br /> <br />XVUI. GLOSSARY <br /> <br />AGENCIES: <br />Federal agency securities and/or govem- <br />ment-sponsored enterprises. <br />ASKED PRICE: <br />The price utwhich securitJCS are bought hy <br />the City. (When buying securities you ask <br />for an offer.) <br />BANKERS' ACCEPTANCE (HA): <br />A securitized draft or bdl or exchange <br />accepted by a bank or trust company The <br />accepting institution guarantees payment of <br />the bill, as well as the issuer <br />BIn PRICE: <br />The price at which securities are sold. <br />(When you are selling securities, you ask <br />for a bid,) <br />BROKER: <br />A firm or person bringing buyers and <br />sellers together for a fee. A Dealer may act <br />as a broker. <br />CERTIFICATE OF DEPOSIT (CD): <br />A bank time deposit evidenced by a <br />certificale, Large-denomination CD's are <br />typically negotiable, <br />COLLATERAL: <br />SecuTltics" evidence of deposit or other <br />property which a borrower pledges to <br />secure repayment of a loan or pledged by a <br />bank to seCUre deposits of public monies, <br />Collateral for repurchase agreements are <br />owned not pledged by the eountcr-party <br />COMPREHENSIVE ANNUAL <br />FINANCIAL REPORT (CAFR): <br />The otlicial annual report for the CIty of <br />San Marcos, It includes f1ve combmed <br />statements for each indl Vidual fund and <br />account group prepared in conformity with <br />GAAP, It also includes supporting <br />schedules necessary to demonstrate <br />compliance with fmance-related legal and <br />contractual provisions, extensive <br />introductory material. and a detailed <br />Statistical Section, <br /> <br />Cll) of San Marcos Investment Policy <br /> <br />COUPON: <br />(a) The annual rate ofmterest that a bond's <br />issuer promises to pay the bondholder on <br />the bond's face value or rate on a CD. (b) <br />A redeemable physical certificate attached <br />to a physical bond evidencing interest due <br />on a particular payment date, <br />DEALER: <br />A dealer acts as a principal in all <br />transactions, buying and selling for his O\'.'Il <br />account A dealer may broker a trade not <br />from his/her portfolio_ <br />DEBENTURE: <br />A bond secured only by the general credit <br />oftbe issuer. . <br />DELIVERY VERSUS PAYMENT (DVP): <br />Delivery of book-entry securities. with a <br />simultaneous exchange of money for the <br />securities for control, <br />DELIVERY VERSUS RECEIPT (I>VIl): <br />Delivery of securities with an exchange of <br />a signed receIpt for the securities. <br />DERIVATIVES; <br />(1) Financial instruments whose return <br />profile is derived from one or marc <br />underlying index or security (interest rates, <br />foreign exchange rates, equities or <br />commodities), and may Include a <br />leveraging factor, or r~) financial COllWlC1S <br />derived from an underlying mdex or <br />security. <br />DISCOUNT: <br />(a) The difference bet\veen the settlement <br />cost price ofa security and Its face value at <br />maturity when priced at lower than face <br />value_ (b) A securjry se11ing at a discount. <br />mSCOUNT SECURITIES: <br />Non-interest bearing securities sold a1 a <br />discount, e.g.. U.S, Treasury Bills, agency <br />discount notes, and CPo <br />DIVERSIFICA TJON: <br />Practice of using a variety of securities to <br />spread risk. <br /> <br />Page 9 <br />