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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />0 <br />1 <br />1 <br />LITTLE CANADA FIREMEN'S RELIEF ASSOCIATION <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1990 <br />Page 3 of 8 <br />Note 4 CASH AND INVESTMENTS (Continued) <br />INVESTMENTS <br />Minnesota Statutes authorize the Relief Association to invest in the following: <br />A) Govemmental bonds, notes, bills, mortgages and other fixed obligations, including <br />guaranteed or insured issues of: <br />1) The United States or its agencies. <br />2) Canada and its provinces. <br />3) States and their municipalities. <br />B) Corporate bonds, notes, debentures or any other long -term evidence of indebtedness issued <br />or guaranteed by a corporation organized under the laws of the United States or the <br />Dominion of Canada if they conform to the following provisions: <br />1) The principal and interest of obligations of corporations incorporated or <br />organized under the laws of the Dominion of Canada or any province thereof <br />shall be payable in United States dollars; <br />2) Obligations shall be rated among the top four quality categories by a nationally <br />recognized rating agency; and, <br />3) For unrated obligations, the corporation shall have issued other similar securities <br />rated according to clause or: i) the consolidated net pre-tax earnings of <br />corporations other than banks and finance corporations shall have been on <br />average for the preceding five years at least three times the annual interest <br />charges on total funded debt applicable to that period; or ii) the consolidated net <br />pre-tax earnings of banks and finance corporations shall have been on average for <br />the preceding five years at least 2.4 times the annual interest charges on total <br />funded debt applicable to that period. <br />C) Banker's acceptance of United States banks eligible for purchase by the Federal Reserve <br />System. <br />D) Commercial paper issued by United States corporations or their Canadian subsidiaries, of <br />the highest quality, and maturing in 270 days or less. <br />E) Mortgage participation or pass through certificates evidencing interests in pools of first <br />mortgages. <br />F) Guaranteed investment contracts issued by insurance companies rated in the top four <br />quality categories by a nationally recognized rating agency. <br />Page 69 <br />