Laserfiche WebLink
Glossary of Investment Terms <br /> AGENCIES. Shorthand market terminology for any obligation issued by a government- <br /> sponsored entity(GSE), or a federally related institution. Most obligations of GSEs <br /> are not guaranteed by the full faith and credit of the US government. Examples <br /> are: <br /> FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the <br /> agricultural industry. FFCB issues discount notes and bonds. <br /> FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing <br /> market. FHLB issues discount notes and bonds. <br /> FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit <br /> and liquidity in the housing market. FHLMC, also called "FreddieMac" issues <br /> discount notes, bonds and mortgage pass-through securities. <br /> FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association <br /> was established to provide credit and liquidity in the housing market. FNMA, <br /> also known as "FannieMae," issues discount notes, bonds and mortgage pass- <br /> through securities. <br /> GNMA. The Government National Mortgage Association, known as "GinnieMae," <br /> issues mortgage pass-through securities, which are guaranteed by the full faith <br /> and credit of the US Government. <br /> PEFCO. The Private Export Funding Corporation assists exporters. Obligations of <br /> PEFCO are not guaranteed by the full faith and credit of the US government. <br /> TVA. The Tennessee Valley Authority provides flood control and power and <br /> promotes development in portions of the Tennessee, Ohio, and Mississippi <br /> River valleys. TVA currently issues discount notes and bonds. <br /> ASKED. The price at which a seller offers to sell a security. <br /> ASSET BACKED SECURITIES. Securities supported by pools of installment loans or leases <br /> or by pools of revolving lines of credit. <br /> AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to <br /> expected receipt of principal payments, weighted by the amount of principal <br /> expected. <br /> BANKER'S ACCEPTANCE. A money market instrument created to facilitate international <br /> trade transactions. It is highly liquid and safe because the risk of the trade <br /> transaction is transferred to the bank which "accepts" the obligation to pay the <br /> investor. <br /> BENCHMARK. A comparison security or portfolio. A performance benchmark is a partial <br /> market index, which reflects the mix of securities allowed under a specific <br /> investment policy. <br /> BID. The price at which a buyer offers to buy a security. <br /> BROKER. A broker brings buyers and sellers together for a transaction for which the broker <br /> receives a commission. A broker does not sell securities from his own position. <br /> CALLABLE. A callable security gives the issuer the option to call it from the investor prior <br /> to its maturity. The main cause of a call is a decline in interest rates. If interest <br /> rates decline since an issuer issues securities, it will likely call its current securities <br /> and reissue them at a lower rate of interest. Callable securities have reinvestment <br /> 15 <br />