VILLAGE OF GRAFTON NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended December 31, 2016 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A. DEPOSITS AND INVESTMENTS (cont.) Concentration of Credit Risk (cont.) At December 31, 2016, the investment portfolio was concentrated as follows: Issuer Investment Type Percentage of Net Position Federal Farm Credit Banks Funding Corporation US Agency 8.03% Federal Home Loan Mortgage Corporation US Agency 5.51% Federal National Mortgage Association US Agency 20.13% US Treasury US Treasury 31.50% Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment. As of December 31, 2016, the village's investments were as follows: Maturity (In Years) Investment Type Fair Value Less than 1 1-3 4-7 Repurchase agreements - US agencies $ 31,811 $ 31,811 $ - $ - US treasuries 1,994,624 982,562 1,012,062 - US agencies 2,715,636 452,240 1,978,255 285,141 Certificate of deposits - negotiable 1,589,613 - 1,589,613 - Totals $ 6,331,684 $ 1,466,613 $ 4,579,930 $ 285,141 Investments Highly Sensitive to Interest Rate Changes At December 31, 2016, the village held $1,589,613, $2,715,636 and $1,994,624 in certificate of deposits - negotiable, US agencies and US treasuries, respectively. With all fixed income securities, as interest rates rise, the values will fall. The longer the time to maturity, the more sensitive the value will be to a change in interest rates. The longest time to maturity on any holding is four years maturing December 30, 2020. See Note I.D.1. for further information on deposit and investment policies. 63