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1 I <br /> MARK-TO-MARKET-An adjustment in the valuation of a securities portfolio to reflect <br /> the current market values of the respective securities in the portfolio.This process is <br /> also used to ensure that margin accounts comply with maintenance. <br /> MARKETABILITY-Ability to sell large blocks of money market instruments quickly and <br /> at competitive prices. <br /> MARKET RISK-The risk associated with declines or rises in interest rates which cause <br /> an investment in a fixed-income security to increase or decrease in value.The risk that <br /> the market value of an investment,collateral protecting a deposit, or securities <br /> underlying a repurchase agreement will decline. <br /> MARKET VALUE-The price at which a security is trading and could presumably be <br /> sold. <br /> MASTER REPURCHASE AGREEMENT-An agreement between the investor and the <br /> dealer or financial institution.This agreement defines the nature of the transactions, <br /> identifies the relationship between the parties, establishes normal practices regarding <br /> ownership and custody of the collateral securities during the term of the investment, <br /> provides for remedies in the event of a default by either party and otherwise clarifies <br /> issues of ownership. <br /> MATURITY- The time when a security becomes due and at which time the principal <br /> and interest or final coupon payment is paid to the investor. <br /> NET WORTH -A financial institutions'available funds after their total liabilities have <br /> been deducted from their total assets. <br /> OFFER-The indicated price at which a seller is willing to sell a security or commodity. <br /> (See BID) When buying a security an offer is obtained. <br /> PAR VALUE -The nominal or face value of a debt security;that is,the value at maturity. <br /> PREMIUM -The amount by which a bond sells above its par value. <br /> PRIMARY DEALERS -A pre-approved bank, broker/dealer or other financial institution <br /> that is able to make business deals with the U.S. Federal Reserve such as underwritin. <br /> new government debt.These dealers must meet certain liquidity requirements as well <br /> as provide a valuable flow of information to the Fed about the state of the worldwide <br /> markets. <br /> PRINCIPAL-An invested amount on which interest is charged or earned. <br /> PRUDENCE- The ability to govern and discipline oneself by the use of reason. <br /> Shrewdness in the management of affairs.Able to use skill and good judgment in the <br /> use of resources. <br />