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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />pECEMBER..39, 2015 <br />NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) <br />B. Investments (Continued) <br />Interest Rate Risk <br />Interest rate risk is the risk that changes in interest rates will adversely affect the fair <br />value of .an investment. Generally, the longer the maturity of an investment, the greater <br />the sensitivity of its fair value to changes. in market interest rates. The City's investment <br />policy doesn't specifically address interest rate. risk. Information about the. sensitivity of <br />the fair values of the City's investments to market interest rate risk fluctuations. is <br />provided by the following table that shows the distribution of the City's investments by <br />m atu rity: <br />12.Months 13 to 24 25 to.6❑ More than <br />Type _ Total or Less Months Months 6o Months <br />Negotiable Certificates or Deposit $552,025 .$421,012 $100.301 $ - $40312 <br />WeIIs Fargo Prune Investment Fund 1651254 165;254 - - <br />Total $ 727;279 $ 588;266 $ 100,301 $ - S 40,712 <br />Credit' Risk <br />Generally, credit risk is the risk`that an s' suer,of an investment will not fulfill its obligation <br />to the holder of the. investment. This s:measured by the assignment of a rating by a <br />nationally recognized statistical rating_ organization, The City's investment policy doesn't <br />specifically address credit risk. The fallawirig<chart summarizes year-end ratings for the <br />City's investments as. rated by Moady's 1riJestors Services: <br />Credit <br />Type Quality Ratite Amount <br />Government Money'Market,MuNal Funds Nk. $ 165,254 <br />Negotiable Certificates of Dnpgsit <br />Santander Bank CD-1 NR 175,000 <br />GE Capital Bank CD NR 248,0.12 <br />Goldman Sachs Bank CD NR 141,013 <br />Total Negotiabie.Certificates of Deposits 562,025 <br />Total $ 727.279 <br />NR = Not Rated <br />(23) <br />