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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (Continued) December 31, 1988 Note 2. CASH AND INVESTMENTS (continued) B. Investments The City may also invest idle funds as authorized by Minnesota Statutes, as follows: o Direct obligations or obligations guaranteed by the United States or its agencies. o Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described above. o General obligations of the State of Minnesota or any of its municipalities. o Bankers' acceptances of United States' banks eligible for purchase by the Federal Reserve System. o Commercial paper issued by United States' corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. • Repurchase or reverse purchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities broker - dealers. o Futures contracts sold under authority of Minnesota Statutes Section 471.56, Subdivision 5. The City's investments are categorized below to give an indication of the level of risk assumed at year -end. Category 1 includes invest- ments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty or by its trust department or agent but not in the City's name. Investment balances at December 31, 1988, are as follows: