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INFORMATION <br />the i makes sure eve are su~.c~ent~~~ ~qu~.d bar continua~~r updat~n~ cur forecast vn ~~ <br />anticipated cash 1~~~ needs ~~~ the ne:~t ~i~re year tie baron. 'ale also build i~ a reserve <br />balance incase of unexpected e~penc~tu~es, these funds are ~ainta~ned ~ n~~ne~~ n~~xket <br />accaunts laugh the ~~~ und~ ~ antipate the fact that eve ~~ have ~vo urge tai <br />settlements each dear, along ~~i~ t~~e re,arly scheduled debt service pa~rmnt that accur <br />each dear, <br />err the past cau~le of months there ~~as been increased ol.tilir tl~e bond n~arl~ets and <br />tia ~tield curare ~~a started to sho~~r signs ~~ an up~~rard~ sloping sl~ape ~~rhich ~~ meant ~ong- <br />term secuxit~es sl~gh~.~~ e~:ceed returns on sh~rt~tera instruments. ~ rna~F also indicate that <br />investors still. pre~'er liqu~d~t~t and ~~-i~ take a l~~ver ~rie~c~ fir shirt-t.x~ and secure <br />investments. <br />the i has to ~~eight ~.~e oppr~rtuni~r cost tc~ invest ~ longer term in~testments ~~ ride the <br />Meld curare and rein~`est at shorter n~atu.~ty .ter~~ais. the chart indicates the ~rields laave <br />decreased ~ ever~r t~.e hori~an the past a months. is current ~rieid curare praides <br />some additional Meld ~'or tine additianai market risk inherent ~n ianger term maturities ~~th <br />our tine ho~on. 'here~ore, eve ~. continue to monitr~r e ~Tield curare and, i~` r.~arl~et <br />dictates, start shifting n~.ore ~rorn shortyter~n~intenediate into ianger tern investrner~ts. e~ <br />~a~~c~~ illus~r~t~an b~ln: ~xt:~/~~~~~~F.t~streas.~v~~~~c~~ f ~~met~e-~i~ar~ce f de~t~ <br />man:~~~rn~~t~intcrestw~~te~~°ield~.~~~~ta~a~.~h.~ <br />pities generall~r use a chart horan'benchrnark such as the ~~ da~f 'reasur~r Bill ~~~~~1~~0~ <br />D.1 ~ ~1~~ ~~ some similar measure. fur current part~`ao ~~ield ~ rougl~r . ~ ~~1~~ ~~ is <br />calculated b~~ salting tl~e ~~ieid yes the current ~ralue £~~ each ~n~restn~ent and di~~id~n the <br />resuiti~.g at~c~unt her the to~~l portfolio ~ralue..~s in~~estment purchased . earlier gears <br />nature eve ~~ be able to replace them and iocl~ into some longer terms. interest rates, but <br />they l~~~r h~.ve ~~ be reinves~ed at leer interest rates as market conditions change. It i ~e~ <br />t~~pical to lag the marl~et a i~.teret rates change. phis will lead to pore predictabilit~~ our <br />interest earnings. <br />,quidit~f leas been harder to Maintain for e past couple o~ ~~antl~s because ~~ the up~~vard <br />lopg ~ieid curare. This means ti~at short~ter~. investments aye recei~~.n a slighd.~r lesser <br />return than long~tern~ investments thin the it~r's investment tine hari.~on. s the cuxve <br />shi~'ts o~rer tl7e nest couple ~~ tnantl~s ~~ even becomes mare upward slop eve ~~ <br />n~.anit~r e gates anal ingest accordinl~r. fur p~ar~r reserve account is our ~~ fund <br />