Breaking The Buck

Breaking The Buck
When the net asset value (NAV) of a money market fund falls below $1. Breaking the buck can happen when the money market fund's investment income does not cover operating expenses or investment losses. This normally occurs when interest rates drop to very low levels, or the fund has used leverage to create capital risk in otherwise risk-free instruments.

The NAV of a money market fund normally stays constant at $1 because investment products usually do not produce capital gains or losses. As such, the principal in a money market fund usually remains constant, making risk exposure non-existent compared to stocks, bonds and non-money market mutual funds.

The first case of a money market fund breaking the buck occurred in 1994, when Community Bankers U.S. Government Money Market Fund was liquidated at 94 cents because of large losses in derivatives.


Investment dictionary. . 2012.

Игры ⚽ Нужно сделать НИР?

Look at other dictionaries:

  • Broke The Buck — When a money market mutual fund s net asset value (NAV) drops below $1 per share. Money market funds aren t federally insured like bank deposits; therefore, fund assets have an implied promise to preserve capital at all costs and preserve the $1… …   Investment dictionary

  • Breaking the Ethers — Infobox Album Name = Breaking the Ethers Type = Album Artist = Tuatara Released = 1997 03 01 Recorded = Genre = World music Length = Label = Epic Records Producer = Reviews = *Allmusic Rating|3|5 [http://wm04.allmusic.com/cg/amg.dll?p=amg… …   Wikipedia

  • The Young Bucks — Jeremy Buck (left) and Max Buck (right) in 2010 on TNA Impact!. Ring name(s) Generation Me[1] The Jackson Brothers …   Wikipedia

  • The Spanish Inquisition (Monty Python) — The Spanish Inquisition is a series of sketches in Monty Python s Flying Circus, Series 2 Episode 2, first broadcast 22 September 1970, parodying the real life Spanish Inquisition. This episode is itself entitled The Spanish Inquisition . The… …   Wikipedia

  • The Outsiders (TV series) — The Outsiders was a 13 part television series based on the characters from the 1967 novel of the same title by S. E. Hinton. The show aired in 1990 on Fox. Hinton co wrote the pilot episode with Alan Shapiro. Cast*Jay R. Ferguson (Ponyboy Curtis) …   Wikipedia

  • The Dark Knight (film) — The Dark Knight Theatrical release poster …   Wikipedia

  • buck — [[t]bʌ̱k[/t]] bucks, bucking, bucked 1) N COUNT A buck is a US or Australian dollar. [INFORMAL] That would probably cost you about fifty bucks... Why can t you spend a few bucks on a coat?... This means big bucks for someone. Syn: dollar 2) N… …   English dictionary

  • Buck (dog) — This article is about the fictional canine character; see also other uses of buck. Buck, a fictional dog, is the main character in the novel The Call of the Wild by Jack London. His mother was a Scots Shepherd; his father was a Saint Bernard; and …   Wikipedia

  • Buck Brothers — Infobox musical artist Name = Buck Brothers Img capt = Background = group or band Origin = London, England Years active = 2005 – Present Genre = Pop Punk Alternative,Rock Current members = Andy Duke Dom (Becksi) Beckford Craig Welsh URL =… …   Wikipedia

  • The Dukes of Hazzard — For the 2005 film, see The Dukes of Hazzard (film). The Dukes of Hazzard Title card Genre Action/Family drama/Comedy …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”