Sarasota County Investment Policy 2018

Sarasota County Investment Policy 26 118. SWAP: Trading one asset for another. 119. TENNESSEE VALLEY AUTHORITY (TVA): The TVA is a federally owned corporation and is not authorized to issue stock. Additionally, the TVA does not receive any federal funding. Instead, it finances its operations through the sale of TVA bonds and through the sale of energy. The TVA sells four kinds of bonds: Putable Automatic Rate Reset Securities (PARRS); TVA ElectroNotes; Discount Notes; and Other TVA Power Bonds, which are issued domestically and internationally and carry a wide variety of maturities, terms, returns and currency denominations. Per congressional mandate, the TVA cannot have more than $30 billion of debt outstanding at any one time, and it can only issue bonds to fund its power program or refinance existing debt. 120. TERM BOND: Bonds comprising a large part or all of a particular issue which come due in a single maturity. The issuer usually agrees to make periodic payments into a sinking fund for mandatory redemption of term bonds before maturity. 121. TIME DEPOSITS: See “CD’s”. 122. TOTAL RETURN: The sum of all investment income plus changes in the market value of the portfolio. 123. TREASURY BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year. 124. TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years. 125. TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of 10 years or less. 126. UNIFORM NET CAPITAL RULE: A rule originally created by the U.S. Securities and Exchange Commission ("SEC") in 1975 to regulate directly the ability of broker-dealers to meet their financial obligations to customers and other creditors. 127. VOLATILITY: A degree of fluctuation in the price and valuation of securities. 128. WEIGHTED AVERAGE MATURITY (WAM): The average maturity of all the securities that comprise a portfolio. 129. YIELD: The current rate of return on an investment security generally expressed as a percentage of the security's current price. 130. YIELD CURVE: A graph showing the relationship at a single point in time between the available maturities of a security or similar securities with essentially identical credit risk and the yields that can be earned for each of those available maturities. A graphical depiction of the term structure of interest rates at any given point in time. Yield curves may be constructed for different instruments. 131. YIELD-TO-CALL: The rate of return an investor earns from a bond assuming the bond is redeemed (called) prior to its nominal maturity date. 132. YIELD-TO-MATURITY: The rate of return yielded by a debt security held to maturity when both interest payments and the investor's potential capital gain or loss are included in the calculation of return.