Income Beginner: Introduction to Money Market Funds

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1.
Money market funds that invest in short-term Treasury bills have yields that are ________ than non-Treasury money market funds.
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Lower. US Treasury money market funds generally have lower yields than other money market funds.
2.
The Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund do not insure money market mutual funds.
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True. Some investors consider this a disadvantage.
3.
Money market mutual funds usually invest in long-term government bonds and CDs.
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False. Money market funds hold short-term debts of both government units and corporations.
4.
You are allowed to write checks from a money market mutual fund.
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True. This is one of the many popular features offered by these funds, but you must write your checks for at least a certain amount, such as $250.
5.
Due to the stability of the underlying instruments, money market fund shares are guaranteed to remain at $1.00.
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False. They cannot guarantee this, although money market funds usually keep their net asset values at $1 per share.