The recommended changes are as follows:

The liquidity amount needed monthly decreased from $63 million to $60 million due to budget appropriations being lower for fiscal year 2002-2003.

The total policy has been completely rewritten to meet the certification approval by the MTA US&C (Municipal Treasurer�s Association of the United States and Canada). I have removed repurchase agreements and reverse repurchase agreements as permitted investments for this year. I have added a new glossary of terms to aid in the understanding of investment terminology. Also attached is the California Statutes applicable to municipal investments. A new broker/dealer, UBS/PaineWebber has been added for this year.

These recommendations have been reviewed and approved by the Fiscal & Treasurer�s Review Group (F&TRG) and the Treasurer�s Oversight Review Committee (TORC). The F&TRG members are Mary Alvord, Assistant City Manager, Derek Hanway, Financial Services Director, Richard Corbi, Assistant General Manager Finance & Administration, BWP, Marsha Ramos, Council Liaison to the Treasurer�s Office and Stacey Murphy, Council Liaison to the Treasurer�s Office. The TORC members are Dave Hackett, Bob Jensen, Carrie McCoy and Dick Baker.

I recommend that the City, Redevelopment Agency, Parking Authority, Youth Endowment Services and Housing Authority adopt motions approving the Investment Policy for 2003.

This statement is intended to establish the policies for prudent investment of the City's funds, and to provide guidelines for suitable investments.

It is the policy of the City of Burbank to invest public funds not required for immediate day-to-day operations in safe and liquid investments having a market-average rate of return while conforming to all state statues governing the investment of public funds.

The ultimate goal is to enhance the economic status of the City while protecting its funds.

The investment policies and practices of the City of Burbank are based upon Federal, State and local law, and prudent money management. The primary goals of these policies are:

1. To assure compliance with all Federal, State and local laws governing the investment of monies under the control of the City Treasurer.

2. To maintain the principal value of assets entrusted to this office and provide adequate liquidity to meet operating expenditures.

It is recognized that within a well-diversified portfolio, at any particular point in time, that security valuations are impacted by changes in interest rates and economic conditions. Accordingly, securities may at times be worth less than original purchase price based on market fluctuations. It is further understood, however, that in the event of the need for a forced liquidation of investments to meet unplanned or unanticipated cash flow demands, a potential loss of investment principal might occur.

3. Within constraints of safety and liquidity, generate a market rate of return within the parameters of this Statement of Investment Policy and the guidelines for suitable investments.

In accordance with the City of Burbank Charter Section 13 and subsequent ordinance, the City Treasurer is authorized to invest the City's funds in accordance with California Government Section 53600 et seq. This investment policy applies to all financial assets, investment activities and debt issues of the City of Burbank. This policy covers the investment activities of all contingency reserves and inactive cash balances under the direct authority of the City.

All monies entrusted to the City Treasurer will be pooled in a diversified portfolio. The Investment Pool or "Portfolio" will be referred to as the "Pool" throughout the remainder of this document. The City Treasurer and staff will observe, review and react to changing conditions that affect the Pool.

Investments made on a pooled basis include investments of the City and its component units, including the City of Burbank, the Redevelopment Agency, the Parking Authority, the Youth Endowment Services (YES), the Public Financing Authority, and the Housing Authority (separate, not part of the pool). The City�s Comprehensive Annual Financial Report identifies the fund types incorporated under the City�s investment pool as follows:

• General Fund
• Special Revenue Funds
• Capital Project Funds
• Enterprise Funds
• Internal Service Funds
• Fiduciary-Agency Funds
• Any new funds created by the City Council, unless specifically exempted

All debt issue proceeds will be invested in accordance with the associated trust indenture, and in such a manner that facilitates arbitrage rebate calculations.

Generally, investments shall be made in the context of the "Prudent Investor" rule which states that:

"Investment shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The City will employ a passive strategy, i.e. the City intends to hold most investments until its stated maturity. The City philosophy prohibits speculation (i.e. purchase of securities with intent to profit from favorable changes in market prices) in the Pool."

Safety of Principal is the foremost objective of the City of Burbank. Each investment transaction shall seek to ensure that capital losses are avoided, whether from institution default, broker-dealer default, or erosion of market value of securities. The City shall seek to preserve principal by mitigating the two types of risk, credit risk and market risk.

1. Credit Risk. Credit risk, defined as the risk of loss due to failure of an issuer of a security, shall be mitigated by employing California State Statutes and by diversifying the Pool so that the failure of any one issuer would not unduly harm the City's cash flow.

2. Market Risk. The risk of market value fluctuations within the total investment portfolio due to overall changes in the general level of interest rates, shall be targeted to reflect the interest rate risk (duration) of a two year treasury.

Liquidity will also be a foremost objective of the City of Burbank. It is important that an investment contain the feature of being easily sold at any time with a minimal risk of loss of some portion of principal or interest. The City may experience unexpected or unusual circumstances that result in some investments needing to be sold to meet a contingency. Therefore, the City maintains a high degree of liquidity in its Pool.

Current liquidity is defined here as all investments maturing within one year and real estate taxes due from the county (estimated to be $13 million) in April and December. The liquidity needed monthly for 2003 is $29,550,00 (all reserves) plus 1/12 of annual appropriations less purchased power ($451,253,506-$92,256,722/12 = $29,916,399) for a total of $59,466,399 � rounded to $60 million.

To the extent possible, investments will be made so that maturities are compatible with cash flow requirements. No single investment shall be purchased with a term to maturity at the date of purchase that exceeds five years, without the approval also of the Financial Services Director, with the maximum allowed not to exceed $10 million from over five years to ten year maturities.

Maturities of investments will be selected based on liquidity requirements in order to minimize interest rate risk and maximize earnings. Current and expected yield curve analysis will be monitored, and the portfolio will be invested accordingly. The weighted average maturity of the pooled portfolio should be in the range of two and one-half years. As a general investment guideline, the following percentages of the pooled portfolio should be utilized in the selection of investment maturity sectors:

The City�s investment pool will be diversified to avoid incurring unreasonable and avoidable risks. The investments will be diversified by security type, maturities of those investments, and institutions in which those investments are made.

Investment return becomes a consideration only after the basic requirements of investment safety and liquidity have been met. The City�s pool shall be designed to attain a market-average rate of return through economic cycles. The performance measurement used shall be the twelve month moving average of the two year Constant Maturity Treasury Index (CMT).

Investment maturities shall be consistent with the cash flow requirements of the City. The Treasurer will maintain a sufficient, well-balanced mix of investment maturities consistent with the operating cash requirement of the City.

The City Treasurer shall have an independent investment advisory committee. The appointees to the Treasurer�s Oversight Review Committee (TORC) shall exhibit, through a combination of experience and education, sufficient knowledge of Investment Instruments as to provide contributory advice to the meetings of the TORC.

The TORC shall meet on a quarterly basis to review the status of the investment pool and to discuss investment portfolio management strategy. The intended purpose of the TORC is to serve in an advisory capacity to the City Treasurer. Serving in this advisory capacity, the TORC will serve an oversight role to the function of City Treasurer portfolio management, ensuring that the investment decisions of the City Treasurer are made in compliance with established investment policy guidelines.

Also, the Fiscal & Treasurer�s Review Group (F&TRG), which consists of the Assistant City Manager, Financial Services Director, Assistant General Manager, Finance & Administration, BWP, and the two council liaisons to the Treasurer�s office, will also meet quarterly to review the portfolio report that will be presented to City Council.

The City Treasurer shall continue to submit a monthly report to the Mayor, the Council liaisons to the Treasurer�s office, the City Manager, the TORC, and other department heads of the City. This report will show the type of investment, issuing institution, date of maturity, amount of deposit, current market value for all securities, rate of interest, percentage of the portfolio representing each investment category, and such data as may be required by the City Council. The City Treasurer shall make quarterly presentations to the Treasurer�s Oversight Review Committee (TORC), the Fiscal & Treasurer�s Review Group (F&TRG), and to the City Council analyzing the portfolio and investment market trends.

All participants in the City�s investment process shall seek to act responsibly as custodians of the public trust. The City Treasurer, or when appropriate the Financial Services Director, if the City Treasurer is absent, shall avoid any transaction that might impair public confidence in the City�s ability to govern and manage the investment of public funds in an effective manner. The City Treasurer, or other official charged with the responsibility of making investment decisions shall have no vested interest in any investment being made involving public funds of the City, and shall gain no financial benefit from such investment decisions.

VI. AUTHORIZED INVESTMENTS

The City shall not enter into any investment transaction that might impair public confidence in the Burbank City government. The City is governed by the California Government Code, Sections 53600 et seq. Within the context of these limitations, the following investments are authorized, as further limited herein:

United States Treasury Bills, Notes and Bonds, or those for which the full faith and credit of the United States are pledged for payment of principal and interest. This investment is both safe and liquid. There is no percentage limitation of the pool that can be invested in this category, but there are maturity limitations.

Government National Mortgage Association (GNMA), the Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank Board (FHLB), the Federal Home Loan Mortgage Corporation (FHLMC), the Student Loan Mortgage Administration (SLMA), and the Federal National Mortgage Association (FNMA) and those insured by the Federal Housing Administration (FHA). The "prudent investor" rule shall apply for a single agency name, as U.S. Government backing is implied rather than guaranteed.

C. Banker�s Acceptances-- Maximum of 40%

Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as banker's acceptances. Banker's acceptances purchased may not exceed 180 days to maturity or forty percent of the portfolio. No more than thirty percent of the total portfolio may be invested in banker's acceptances issued by any one bank. Only the banker's acceptances eligible for purchase by the Federal Reserve System meet eligibility requirements for investment by the pool.

The City may invest in non-negotiable time deposits collateralized in accordance with the California Government Code, in those banks and savings and loan associations that meet the requirements for investment in negotiable certificates of deposit. All investments in time deposits must be properly collateralized in accordance with Section 53652 of the California Government Code. The City Treasurer will periodically monitor, on a discretionary yet diligent basis, the operating performance of all financial institutions holding City time deposits, to ensure compliance to collateralization requirements.

Negotiable certificates of deposit issued by a Nationally or State-Chartered Bank or a State or Federal Savings and Loan Association.

Commercial Paper ranked "P1" by Moody's Investor Services or "A1" by Standard and Poor's, and issued by a domestic corporation having assets in excess of $500,000,000 and having an "A" or better rating on its long term debentures as provided by Moody's or Standard and Poor's. Purchases of eligible commercial paper may not exceed fifteen percent of the total pool or have a term to maturity that exceeds 270 days. No more than ten percent of the pool may be invested in commercial paper issued by any one corporation.

The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer for the benefit of local agencies up to the maximum permitted by State law.

H. Medium-Term Notes-- Maximum of 30%

Medium-term notes with a maximum of five years maturity issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment shall be rated in a rating category of "A" or its equivalent or better by a nationally recognized rating service. No more than thirty percent of the pool may be invested in medium-term notes. No more than ten percent may be invested in notes issued by one corporation.

I. Money Market Funds-- Maximum of 15%

The money market funds must have an average weighted maturity of ninety days or less, and abide by SEC (Securities & Exchange Commission) regulations; funds must receive the highest ranking by two of the three largest nationally recognized rating agencies OR retain an investment advisor registered or exempt from registration with the SEC with not less than least five years� experience managing money market funds in excess of $500 million.

The following summary of maximum percentage limits, by instrument, are established for the City�s total pooled funds portfolio:

Any State of California legislative action, that further restricts allowable maturities, investment type or percentage allocations, will be incorporated into the Investment Policy and supersede any and all previous applicable language.

VII. UNAUTHORIZED INVESTMENTS

Ineligible Investments include securities not listed above, as well as inverse floaters, range notes, interest only strips derived from a pool of mortgages (collateralized mortgage obligations), and any security that could result in zero interest accrual if held to maturity, as specified in Section 53601.6.

8. COLLATERALIZATION

Investments in time certificates of deposits shall be fully insured up to $100,000 by the Federal Deposit Insurance Corporation or the Federal Savings & Loan Insurance Corporation, as appropriate. Investments in time certificate of deposits in excess of $100,000 shall be properly collateralized. Section 53652 of the California Government Code requires that the depository pledge securities with a market value of at least ten percent in excess of the City�s deposit as collateral in government securities, and fifty percent in excess of the deposit as collateral in mortgage pools. Section 53649 of the California Government Code specifies that the City Treasurer is responsible for entering into deposit contracts with each depository. Investments held with Third Parties holding collateral for the investment shall be properly collateralized in accordance with collateralization requirements of the California Government Code.

The City shall transact business only with nationally or state chartered banks, federal or state savings and loan institutions, and registered primary investment securities dealers. The purchase by the City of any investment other than those purchased directly from the issuer, shall be purchased either from an institution licensed by the State as a broker-dealer, as defined in Section 25004 of the Corporations Code, who is a member of the National Association of Securities Dealers, or a member of a Federally regulated securities exchange, a National or State-Chartered Bank, a Federal or State Association (as defined by Section 5102 of the Financial Code), or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank.

To continue to maintain broker/dealers with quality services, expertise, and credit worthiness, the Treasurer may, on a selective basis, expand the approved list of primary dealers to include "qualified regional" dealers.

A "qualified regional" dealer must demonstrate the following requirements:

• The "qualified regional" firm must be able to demonstrate their services and/or expertise is not currently being provided by a primary broker/dealer and will specifically and immediately benefit the City.

• In addition to qualifying under the Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule), the regional dealer does not self clear securities. The clearinghouse through which all transactions are cleared and settled has a minimum investment grade rating of A or better by S&P or Moody.

• The representatives chosen to work with the Treasurer are institutional brokers familiar with and experienced in the specific needs of California public funds. "Familiar" implies an institutional broker who spends the majority of their time and effort working with public funds.

All institutions which the City Treasurer wishes to do business shall be investigated to determine if they are adequately capitalized, have pending legal action against the firm or the individual broker, make markets in the securities appropriate to the City�s needs, and agree to abide by the conditions set forth in the City of Burbank�s Investment Policy.

The City Treasurer shall annually send a copy of the current Investment Policy to all broker/dealers approved to do business with the City. Confirmation is required of broker dealers of receipt of this policy and shall be considered evidence that the dealer understands the City�s investment policies and intends to sell the City only appropriate investments authorized by this investment policy.

To further ensure that investments are purchased only through well established, financially sound institutions, the City Treasurer shall maintain a list of financial institutions and brokers approved for the conduct of investment transactions. All financing institutions and brokers who desire to become qualified bidders for investment transactions will be given a copy of the City�s Investment Policy, and in turn must supply the City Treasurer with the following:

• Current audited financial statements (within 120 days of Fiscal Year End)
• Depository contracts, as appropriate.
• A copy of the latest FDIC call report or the latest FHLBB report, as appropriate.
• Proof that commercial banks, savings banks, or savings and loan associations are state or federally chartered.
• Proof that brokerage firms are members in good standing on a national securities exchange.

Commercial banks, savings banks, and savings and loan associations must maintain a minimum net worth to asset ratio of three percent (total regulatory net worth divided by total assets), and must have had a positive net earnings for the last reporting period.

A list of qualified brokers from which the City may purchase investments will be submitted annually by the City Treasurer for approval by the City Council as part of the annual review of investment strategy.

The investment program shall seek to augment returns consistent with the intent of this policy, identified risk limitations and prudent investment principals. These objectives will be achieved by use of the following strategies:

Active Portfolio Management-- Through active fund and cash flow management taking advantage of current economic and interest rate trends, the pool yield may be enhanced with limited and measurable increases in risk by extending the weighted maturity of the total pool.

Portfolio Maturity Management-- When structuring the maturity composition of the pool, the City shall evaluate current and expected interest rate yields and necessary cash flow requirements. It is recognized that in normal market conditions longer maturities produce higher yields. However, the securities with longer maturities also experience greater price fluctuations when the level of interest rates change.

Security Swaps-- The City may take advantage of security swap opportunities to improve the overall pool yield. Security swaps will be accomplished with no increase in either credit or market risk factors of the swapped securities. A swap, which improves the pool yield, may be selected even if the transactions result in an accounting loss. Documentation for swaps will be included in the City�s permanent investment file documents.

Competitive Bidding-- To ensure that the purchase of City investments is obtained in the most cost effective and efficient manner, the City Treasurer will encourage competitive bidding for City investment transactions. On an annual basis, the City Treasurer will accept applications from qualified members of the investment broker-dealer community interested in bidding on City investment instruments. The City Treasurer shall establish, on an annual basis, a limited array of qualified broker-dealers to serve the City�s investment opportunities. Selection criteria for inclusion on the City�s annual list of broker-dealers will be based upon merit, expertise, and performance.Competitive bidding on individual investment transactions is required on all transactions except those pertaining to "new issue" securities. A new issue security denotes a security that is originally brought to market. Investments in non "new issue" securities, and the sale of all securities, will require the competitive bid of at least three bidders from the approved list of broker-dealers.

Competitive bidding for security swaps is also suggested, however, it is understood that certain time constrains and broker inventory limitations exist which would not accommodate the competitive bidding process. If a time or inventory constraining condition exists, the pricing of the swap should be verified to current market conditions and documented for auditing purposes.

The City Treasurer shall maintain an Investment Procedures Manual to ensure the accurate and timely processing, clearance, and settlement of all City Investments. This manual provides current details with respect to operational procedures associated with the placement and clearance of all City Investments. To ensure the accuracy and timeliness of this Investment Procedures Manual, the manual will be reviewed on an annual basis by the City�s Independent Auditors.

To protect against fraud, embezzlement, or potential losses caused by collapse of individual securities dealers, all securities owned by the City shall be held in safekeeping by a third party bank trust department, acting as agent for the City under the terms of a custody agreement or professional services agreement (repurchase agreement collateral). All trades executed by a dealer will settle delivery vs. payment (DVP) through the City�s safekeeping agent.

Upon purchase, sale, or maturity of investment securities, standing settlement instructions are provided to the servicing banks and broker/dealers involved in the transactions. Adherence to these standing settlement instructions ensures accurate and timely settlement of investment security transactions. Standing settlement instructions are restricted in nature, ensuring investment settlements are with established institutions.

XII. INVESTMENT CONTROLS

The City Treasurer will maintain a system of internal investment controls and segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. Investment controls shall include the establishment of an annual process of independent review of investment transactions by an external auditor. This review will provide internal control by assuring compliance with investment policies and procedures.

The Charter of the City of Burbank and the authority granted by City Council assign the responsibility of investing unexpended cash to the City Treasurer. In the absence of the City Treasurer, the authority to execute investment transactions will be restricted to the Financial Services Director, after notification to the City Council.

This Investment Policy shall be reviewed annually by the Treasurer�s Oversight Review Committee (TORC) and the Fiscal & Treasurer�s Review Group (F&TRG) to ensure its consistency with the overall objectives of preservation of PRINCIPAL, LIQUIDITY, AND YIELD, its relevance to current financial and economic trends, and ability to meet the cash flow operational needs of the City. As part of the City Council�s annual review of the City�s Statement of Investment Policy, and in accordance with the requirements of the California Government Code, the City Council will adopt the City�s Statement of Investment Policy, inclusive of amendments, on an annual basis.

Any investment officer exercising his or her assigned authority with due diligence and prudence, and in accordance with the City's Investment Policy, will not be held personally liable for any individual investment losses or for total portfolio losses.

Accrued Interest-- Interest earned but not yet received.

Active Deposits-- Funds which are immediately required for disbursement.

Agencies-- Federal agency securities

Amortization-- An accounting practice of gradually decreasing (increasing) an asset�s book value by spreading its depreciation (accretion) over a period of time.

Asked Price-- The price a broker dealer offers to sell securities.

Bankers� Acceptance (BA)-- A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.

Basis Point: 1/100^th of 1 percent of yield. If a yield increases from 8.25% to 8.50%, the difference is referred to as a 25 basis point increase

Bid Price-- The price a broker dealer offers to purchase securities.

Bond-- A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Book Value-- The value at which a debt security is shown on the holder�s balance sheet. Book value is acquisition cost less amortization of premium or accretion of discount.

Broker or Municipal Securities Broker: A Person or Firm which acts as an intermediary by purchasing and selling securities (in the case of a "municipal securities broker," municipal securities) for others rather than for its own account. For purposes of the Securities Exchange Act of 1934 the term does not include a dealer bank. The term is also colloquially used to refer to a municipal securities broker's broker.

Broker/Dealer: A general term for a securities firm which is engaged in both buying and selling securities on behalf of customers and also buying and selling on behalf of its own account. The term would not be used to refer to a dealer bank or a municipal securities broker's broker.

Certificate of Deposit-- A deposit insured up to $100,000 by the FDIC at a set rate for a specified period of time.

Collateral-- Securities, evidence of deposit or pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposit of public monies.

Comprehensive Annual Financial Report (CAFR)-- The official annual financial report for the City. It includes combined statements and basic financial statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles (GAAP).

Constant Maturity Treasury (CMT)-- An average yield of a specific Treasury maturity sector for a specific time frame. This is a market index for reference of past direction of interest rates for the given Treasury maturity range.

Coupon-- The annual rate of interest that a bond�s issuer promises to pay the bond holder on the bond�s face value.

Credit Analysis-- A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.

Credit Risk: Default Risk. The risk that an investor will not receive scheduled principal or interest payment. "Safety of Principal is foremost objective of Investment Program

Current Yield-- The interest paid on an investment expressed as a percentage of the current price of the security.

Discount: The amount by which the par value of a security exceeds the price paid for the security

Discount Security: A security which can be purchased for less than the par value

Federal Home Loan Banks (FHLB)-- The institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Banks vis-a-vis member commercial banks.

Liquidity Risk: The risk that funds will not be available for payments of liabilities without prematurely liquidating a security at a loss

Market Value: The amount a seller may expect to obtain in the open market

Market Risk: The risk that the change in value of a security or portfolio due to a change in the level of interest rates will significantly change the market value of the security or portfolio

Money Market-- The market in which short-tem debt instruments (bills, commercial paper, bankers� acceptances, etc.) are issued and traded.

Offer-- The price asked by a seller of securities. (When you are buying securities, you ask for an offer.)

Par: 100% of face value of a security

Par Bond: A bond selling at its face value

Portfolio Duration: Indicator of the effect of an interest rate change on a bond price. The longer the duration, the greater the expected change in a portfolio's value when interest rates change

Portfolio Yield: The percentage of interest earned on a portfolio of securities

Premium: The amount by which the price paid for a security exceeds the security's par value

Premium Security: A security that can be purchased at a price in excess of the par value

Prudent Person Rule-- An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by the custody state-- the so-called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.

Reinvestment Risk: The risk that a fixed-income investor will be unable to reinvest income proceeds from a security holding at the same rate of return currently generated by the holding

Treasury Bills-- U.S. Treasury Bills which are short-term, direct obligations of the U.S. Government issued with original maturities of 13 weeks, 26 weeks and 52 weeks; sold in minimum amounts of $10,000 in multiples of $5,000 above the minimum. Issued in book entry form only. T-bills are sold on a discount basis.

Uniform Net Capital Rule-- Securities and Exchange Commission requirement that member firms as well as nonmember broker-dealers in securities maintain a minimum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.

U.S. Government Agencies-- Instruments issued by various U.S. Government Agencies most of which are secured only by the credit worthiness of the particular agency.

Yield-- The rate of annual income return on an investment, expressed as a percentage. It is obtained by dividing the current dollar income by the current market price of the security.

Yield to Maturity-- The rate of income on an investment, minus any premium or plus any discount, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond, expressed as a percentage.

Yield Curve-- The yield on bonds, notes or bills of the same type and credit risk at a specific date for maturities up to thirty years.

• Ken Herman First Tennessee Bank

• Ben Finkelstein Stanford Group

• Deb Higgins Higgins Capital
• Jason Hamblen Morgan Keegan
• Robert Allen Gilford Securities
• John Doke UBS, Painewebber
• Kirk Walske Banc of America Securities
• Ron Gross Vining Sparks

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