ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -1. Credit risk. Money market securities are susceptible to volatility and are not FDIC-insured, hence the potential to not lose money, however low, is not guaranteed. There exists a probability of loss, although it is generally quite small.

Detailed explanation-2: -With all investments, you run the risk of losing money. Money market funds, however, are widely considered one of the safest, lowest-risk and least volatile investment options.

Detailed explanation-3: -Because they invest in fixed income securities, money market funds and ultra-short duration funds are subject to three main risks: interest rate risk, liquidity risk and credit risk. Interest rate risk measures the impact of changes in rates on the securities held by money market funds.

Detailed explanation-4: -Low-risk investing involves buying assets that have a low probability of incurring losses. While you’re less likely to see losses with a low-risk investment, you’re also less likely to earn a significant return.

Detailed explanation-5: -High-yield savings accounts. Series I savings bonds. Short-term certificates of deposit. Money market funds. Treasury bills, notes, bonds and TIPS. Corporate bonds. Dividend-paying stocks. Preferred stocks. More items