Sarasota County, Florida Notes to Financial Statements September 30, 2024 Interest Rate Risk As of September 30, 2024, the County had the following investments and maturities: The County limits interest rate risk by maintaining an investment portfolio with limited volatility. The policy states that no security shall be purchased having an estimated average return of principal exceeding five years, unless the investment is an adjustable rate security. Adjustable rate securities may have a final return of principal in up to 30 years. In accordance with the County’s investment policy, the County invests in government agency mortgage backed securities and other similar investments. In management’s opinion, the credit and legal risk associated with these investments is comparable to other investments within the portfolio. The collateralized mortgage backed securities are based on cash flows from the underlying government agency guaranteed mortgages. The principal repayment portions could be sensitive to prepayment by mortgagees, which may be affected by interest rate changes. The prepayments and anticipated interest rate changes can therefore affect the fair values of the investments. 101
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