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Answer When an individual or his investment advisor invest money in a money market fund, he expects dividends on regular basis and the investment to yield a certain return (as of June 2008, it is less than 3%). The management of a money market fund, to be able to accomplish this return and pay themselves management fees, has to reinvest this money also. They usually invest them in commercial papers, bank CDs, etc, and since these investments are not risk free, it is possible that they eventually can get back only part of the money they originally invested, thus braking the buck. In such situation the individual may be getting back, for example, 80% on every dollar invested. Answer If a money-market fund gives investors less than a dollar-for-dollar return on their investment, that occurrence is known as "breaking the buck." Basically it means that you are getting a yield less than zero.

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Q: What does it mean that a fund may break the buck?
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