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