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Minnesota Statutes §118A.04, Subd 9. All investments must be placed with brokers whose <br /> office is in the State of Minnesota. No investments may be made with out of state brokers. <br /> 8.0 Authorized and Suitable Investments <br /> Investment instruments authorized and permitted by this policy are as follows: <br /> 8.1 Repurchase Agreements—Repurchase agreements consisting of collateral allowable <br /> in Section 118A.04. <br /> 8.2 United States Securities—Governmental bonds, notes, bills, mortgages (excluding <br /> high-risk mortgage-backed securities), and other securities,which are direct <br /> obligations or are guaranteed or insured issues of the United States, its agencies, its <br /> instrumentalities, or organizations created by an act of Congress. <br /> High risk mortgage-backed securities (which are excluded from investment options <br /> for the utility)are defined as follows: <br /> A. Interest-only or principal-only mortgage-backed securities; and, <br /> B. Any mortgage derivative security that: <br /> 1.) Has an expected average life greater than ten years; <br /> 2.) Has an expected average life that: <br /> C. Will extend by more than four years as the result of an immediate and <br /> sustained parallel shift in the yield curve of plus 300 basis points; or <br /> D. Will shorten by more than six years as the result of an immediate and <br /> sustained parallel shift in the yield curve of minus 300 basis points; or <br /> E. Will have an estimated change in price of more than 17 percent as the result of <br /> an immediate and sustained parallel shift in the yield curve of plus or minus <br /> 300 basis points. <br /> 8.3 Minnesota Joint Powers Investment Trust—Agreements or Contracts for 1) shares of <br /> a Minnesota joint powers investment trust whose investments are restricted to <br /> securities authorized for investment by the government entity, and 2) shares of an <br /> investment company registered under the Federal Investment Company Act of 1940, <br /> whose shares are registered under the Federal Securities Act of 1933, as long as the <br /> investment company's fund receives the highest credit rating and is rated in one of the <br /> two highest risk rating categories by at least one nationally recognized statistical <br /> rating organization and is invested in financial instruments with a final maturity of no <br /> longer than 13 months. <br /> 3 <br /> 107 <br />