Page 316 - City of Colleyville FY22 Adopted Budget

GLOSSARY

AGENCIES – Federal agency securities and/or Government-sponsored entities.

BENCHMARK – A comparative base for measuring the performance or risk tolerance of
the investment portfolio. A benchmark should represent a close correlation to the level
of risk and the average duration of the portfolio’s investments.

BROKER – A broker brings buyers and sellers together for a commission.

CERTIFICATE OF DEPOSIT – A time deposit with a specific maturity evidenced by a
certificate.

COLLATERAL – Securities, evidence of deposit, or other property which a borrower
pledges to secure repayment of a loan. Also refers to securities pledged by a bank to
secure deposits of public monies.

DEALER – A dealer, as opposed to a broker, acts as a principal in all transactions, buying
and selling for his own account.

DELIVERY VERSUS PAYMENT – Delivery verses payment is the delivery of a security
and there is an exchange of money after the delivery of the security.

DISCOUNT SECURITIES – Non-interest bearing money market instruments that are
being issued at a discount and redeemed at maturity for full face value, e.g. Treasury
Bills.

DIVERSIFICATION – Dividing instruments among securities offering independent
returns.

FEDERAL CREDIT AGENCIES – Agencies of the Federal government set up to supply
credit to various classes of institutions and individuals e.g. savings and loans, small
business firms, students, farmers, farm cooperatives, and exporters.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) – A federal agency that
insures bank deposits, currently up to $250,000 per deposit.

FEDERAL HOME LOAN BANKS (FHLB) – Government sponsored regional wholesale
banks which lend funds and provide correspondent banking services to member
commercial banks, thrift institutions, credit unions and insurance companies. The mission
of the FHLB is to liquify the housing related assets of its members who must purchase
stock in their district bank.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) – FNMA, like GNMA was

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