Page 15 - City of Moreno Valley Invstment and Cash Management Program

Considerations Include
BUT ARE NOT LIMITED TO

Is there a market to resell the asset? Cash is considered the most liquid asset, while
Liquidity items such as real estate or fine art are considered relatively illiquid as it may take
more time to convert those items into a tradeable commodity such as cash to meet
financial obligations.

Strategy Does the security fit into the overall portfolio strategy? (Safety, Liquidity, Yield)

Diversifi- Is the investment portfolio diversified? A diversified portfolio contains a mix of asset
classes across multiple market sectors (government, banking, technology, etc.). This
cation asset mix better protects the portfolio from negative swings that may effect one sector
of the market but not necessarily another.

Maturity
Mix Does the mix of bond maturities fit the portfolio strategy?

Credit How stable and safe are securities that are available for purchase? This refers to the
Risk amount of risk the lender (The City) is willing to take on that it may not receive the
owed principle and interest due from the debtor.

Volatility How much fluctuation is in market.

The Yield The Yield Curve is a graphic representation that depicts the relationship, at a given
Curve point in time, between yields and maturities for bonds that are identical. Yield Curve
Analysis generally utilizes Treasury Bills due to their identical characteristics.

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