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mi--../„,„,,40.74,v 1 <br /> , Investment Policy <br /> • <br /> in the overall portfolio. The objective will be to mitigate credit risk and interest rate <br /> risk. <br /> Credit risk is the risk of loss due to failure of the security issuer or backer. Credit risk <br /> will be minimized by: <br /> • Limiting investments to the types of securities listed under authorized and <br /> suitable investments of this investment policy. <br /> • Qualifying the financial institutions,broker/dealers with which the City will <br /> do business in accordance with the authorized financial institute and dealer <br /> section of this policy. <br /> • Diversifying the investment portfolio so that the impact of potential losses <br /> from any one type of security or from any one individual issuer will be <br /> minimized. Insurance or collateral may be required to ensure return of <br /> principal per the collateralization section of this policy. <br /> Interest rate risk is the risk that the market value of securities in the portfolio will fall <br /> due to changes in market interest rates. Interest rate risk will be minimized by: <br /> • Structuring the investment portfolio so that securities mature to meet cash <br /> requirements for ongoing operations,thereby avoiding the need to sellIP <br /> securities on the open market prior to maturity. <br /> • Investing operating funds primarily in shorter-term securities,money market <br /> mutual funds, or similar investment pools and limiting the average maturity of <br /> the portfolio in accordance with this policy. <br /> B. Liquidity—The investment portfolio shall remain sufficiently liquid to meet all <br /> operating requirements that may be reasonably anticipated. This is accomplished by <br /> structuring the portfolio so that securities mature concurrent with cash needs to meet <br /> anticipated demands. <br /> C. Return on investment—The investment portfolio of the City of Oak Grove shall be <br /> designed to attain a market-average rate of return through budgetary and economic <br /> cycles,taking into consideration the City's investment risk constraints, cash flow <br /> characteristics of the portfolio and prudent investment principles. <br /> Subject to requirements of the above objectives, it is the policy of the City of Oak Grove <br /> to offer financial institutions and companies within the City of Oak Grove the <br /> opportunity to bid on investments; however, the City of Oak Grove will seek the best <br /> investment yields. <br /> • <br /> Page 2 of 6 <br />