RES 03099 - Laserfiche WebLink

Glossary Asked Bankers'Acceptance (BA) Bid Broker Collateral Certificate of Deposit (CD) Coupon Dea~r Discount Securities Diversification The price at which securities are offered for sale by prospective sellers. Usually a 3 or 6 month investment where the investor has an interest in the import/export of international trade merchandise backed by a bank. There has never been a default in the history of this investment primarily because the investment is backed by the bank and the actual goods being transported. The price offered for securities by prospective buyers. A broker brings buyers and sellers together for a commission paid by the initiator of the transaction or by both sides. Securities pledged by financial institutions to secure CDs over $100,000. The first $100.000 is federally insured and the excess is coltaterized. In the event of bank default, the depositor would have legal claim to the pledged securities. Time deposit with a certificate specifying the amount, maturity date, rate of interest, etc. The coupon rate is the interest rate at date of issuance on a security and is the rate paid over the life of the investment. At the time of purchase/sale the market rate is compared to coupon and a premium (market rate is lower than coupon rate) or discount (market rate is higher than coupon rate) is added to the face value. A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account. Securities sold at a discount or less than face value. The security is redeemed at full face value upon maturity. Discount securities are usually short-term with maturities less than one year. Dividing investment funds among various types of securities to mitigate risk. Concept of "not putting all your eggs in one basket." Investment Glossary.doc I