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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2007 <br />Note 2 DEPOSITS AND INVESTMENTS (CONTINUED) <br />The Minnesota Municipal Money Market Fund Trust is a common law trust organized in <br />accordance with the Minnesota Joint Powers Act, which invests only in investment instruments <br />allowable under Minnesota statutes as described on the previous page. Its investments are valued <br />at amortized cost, which approximates fair value in accordance with Rule 2a -7 of the Investment <br />Company Act of 1940. The amortized cost method of valuation values a security at its cost on the <br />date of purchase and thereafter assumes a constant amortization to maturity of any discount or <br />premium, regardless of the impact of fluctuating interest rates on the market value of instruments. <br />Credit Risk — The Minnesota Municipal Money Market Trust Fund does not have its own credit <br />rating. MBIA, Inc., who administers the Minnesota Municipal Money Market Fund Trust holds an <br />organization credit rating of Aa2. <br />Custodial Credit Risk <br />For an investment, custodial credit risk is the risk that, in the event of failure of the counterparty, <br />the City will not be able to recover the value of its investment or collateral securities that are in the <br />possession of an outside party. The City's investment policy doesn't specifically address custodial <br />credit risk. <br />Concentration of Credit Risk <br />The City places no limit on the amount that it may invest in any one issuer. The following is a list <br />of investments which individually comprise more than 5 percent of the City's total investments: <br />Type Amount Percentage <br />Federal Home Loan Bank $ 5,653,784 24.39% <br />Federal Home Loan Mortgage Corporation 2,189,113 9.44% <br />General Electric Capital Services Commercial Paper 1,292,898 5.58% <br />43 <br />