We manage our risk exposures to attempt to ensure that the dividend payable on capital stock is competitive compared to members’ alternative investment opportunities and that earnings correlate positively with movements in short-term market interest rates. We believe members view their investment in our capital stock as similar to investing in high-grade short-term or adjustable-rate money market instruments or in adjustable-rate preferred equity instruments.

The Board of Directors has emphasized that a key objective of our mission is to generate stable returns on members’ stock investment relative to short-term rates. Stable returns have economic value to stockholders within the context of our cooperative business model in which a portion of membership benefits accrues from relative stock returns and in which members hold our stock at par value. Ensuring stable relative stock returns enables members to plan for a predictable return relative to their investment alternatives.