(89) The "first mover advantage" is the investor's incentive to make early redemptions from a stable NAV fund (90) when the investor perceives that the redemptions will continue until all liquidity is removed from the fund and the fund will break the buck, thereby potentially causing the investor to lose money if he redeems his shares.
Default in a position held by a MMMF that is greater than 0.5% of the fund's assets can cause a MMMF to "break the buck." Id.
Note the difference between this case and an intermediary's solvency constraint, where the MMF does not break the buck when it can pay all creditors a minimum gross return of 1, whereas the intermediary has to pay the promised interest to the creditors to be solvent.
Assets Liabilities m s = [alpha](l - [mu]) y [l.sub.S] = 1 - [alpha] [l.sub.J] = [alpha][mu] e = 0 The fund does not break the buck at t = 2 if and only if it can pay a return of 1 to all creditors, that is, when [theta]y + [chi]([alpha])(m - [alpha](1 - [mu])) [greater than or equal to] [alpha][mu] + 1 - [alpha], which gives us
In the rare event that an MMF does break the buck
and liquidate, the MBR rule would allocate losses differently than under current rules, which divide losses solely in proportion to each investor's shares in the fund when it closes.
But as the yields on the short-term liquid assets of these funds approach zero, a small negative shock could cause any of them to "break the buck
" if marked to market.
If the US government defaults, however, all of them will "break the buck
," meaning that they will be unable to maintain the principal value of the money that has been placed with them.
A money market is said to "break the buck
" when its NAV drops below $1.
To a lesser extent, the notes may be downgraded if the money market funds should 'break the buck
', Hannover Rueck SE fails to make timely retrocession premium payments or MPIUA materially changes its mission or operations.
government agency recently looked at what might happen to money funds if the eurozone's problems grew or some corporations defaulted on debt and "found so many funds would break the buck
that the conclusions were considered too alarming to publish."
After the break the Bucks
dominated possession but struggled to find a breakthrough as Phil Trainer and Chris Sharp both missed chances.
However, Steve Moore pounced to break the Bucks