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Essay / The Pros and Cons of the Financial Crisis - 566
The financial crisis of 2007-2009 was one of the most difficult financial periods in the United States since the Great Depression. It was a time when many financial institutions were failing, real estate markets were collapsing, and banks had to be bailed out by the government. This led to rising unemployment rates, foreclosures on homes, and falling interest rates. With all of these different systems failing, many investors became concerned about whether their money was safe in money market mutual funds. Money market mutual funds (MMMFs) were first established in 1971 and are a type of mutual fund that must invest in low-risk securities. These securities include highly liquid assets with short-term debt such as: commercial paper, certificates of deposit, U.S. Treasury bills and repurchase agreements. MMMFs hold a net asset value (NAV) of $1 per share, while changes in interest rates reflect the yield earned for investors. MMMFs are an attractive place for investors because they can be tax-exempt or tax-deductible. Additionally, there is usually an entry or payment fee....