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INVERTED YIELD CURVE:A chart formation that illustrates long-term securities having lower yields than <br />short-term securities. This configuration usually occurs during periods of high inflation coupled with low <br />levels of confidence in the economy and a restrictive monetary policy. <br />INVESTMENT-GRADE OBLIGATIONS:An investment instrument suitable for purchase by institutional <br />investors under the prudent person rule. Investment-grade is restricted to those obligations rated BBB or <br />higher by a rating agency. <br />LADDERING: Is a bond investment strategywhereby an investor staggers the maturity of the bonds in <br />his/her portfolio so that the bond proceeds can be reinvested at regular intervals. Laddering avoids the risk <br />of reinvesting a large portion of assets in an unfavorable financial environment. Each "rung" of the ladder is <br />a bond of a specific maturity date and the "height" of the ladder is the difference between the shortest <br />maturity bond and the longest maturity bond. Benefits of utilizing a rolling inventory of bonds with “laddered” <br />maturities are primarily three-fold: <br />(1)Interest rate risk is decreased by holding both short-term and long-term bonds thereby spreading risk <br />along the interest rate curve. If rates are rising, as one bond matures the funds can be re-invested into <br />higher yield bonds. <br />(2)- Decrease re-investment risk because as one bond in the ladder matures, the cash is re-invested, but it <br />only represents a portion of the total portfolio. Even if prevailing rates at the time of re-investment are lower <br />than the previous bond was returning, the smaller amount of reinvestment dollars mitigates the risk of <br />investing a lot of cash at a low return. <br />(3)- Maintain steady cash flows to encourage regular saving to encourage an income-producing portfolio. <br />MARK-TO-MARKET:The process whereby the book value or collateral value of a security is adjusted to <br />reflect its current market value. <br />OFFER PRICE (OR OFFER): The price asked by a seller of securities. (When you are buying securities, <br />you ask for an offer.) See Asked Price and Bid Price. <br />OPEN MARKET OPERATIONS: Purchases and sales of government and certain other securities in the <br />open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the <br />volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate <br />growth of money and credit; sales have the opposite effect. Open market operations are the Federal <br />Reserve's most important and most flexible monetary policy tool. <br />PASSBOOKSAVINGSACCOUNT:A savingsaccountinwhichdepositsandwithdrawalsare recordedin <br />thedepositor'spassbook. <br />QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the <br />payment of any sales or compensating use or ad valorem taxes under the laws of this state, which has <br />segregated for the benefit of the commission eligible collateral having a value of not less than its maximum <br />liability and which has been approved by the Public Deposit Protection Commission to hold public deposits. <br />REINVESTMENT RISK: The risk that a fixed-income investor will be unable to reinvest income proceeds <br />from a security holding at the same rate of return currently generated by that holding. <br />SEC RULE 15(C)3-1 \[Uniform Net Capital Rule\]:Every broker or dealer must at all times have and <br />maintain net capital no less than the greater of the highest minimum requirement applicable to its ratio <br />requirement under paragraph (a)(1) of this section, or to any of its activities under paragraph (a)(2) of this <br />section, and must otherwise not be “insolvent” as that term is defined in paragraph (c)(16) of this section. <br />*´«¸ ΐǾ ΑΏΐ9- <br />C¨³¸ ®¥ 3 ­³  ȃ !­­´ « <br />0 ¦¤ K <br />3³ ³¤¬¤­³ ®¥ )­µ¤²³¬¤­³ 0®«¨¢¸*´­¤ ΒΏǾ ΑΏ20 <br /> <br />