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Why did breaking the buck by Reserve Primary money market mutual fund cause a panic among...

Why did breaking the buck by Reserve Primary money market mutual fund cause a panic among money market mutual fund investors?

(Maximum 3 sentences, maximum 100 words.)

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Answer #1

Many people became concerned with the fact that their investment was not equal to $1/share anymore, and this caused a lot of people to run to less risky securities. This created a lot of doubt behind investors and started the questioning of the stability of the money market funds. Money market investors are primarily concerned with preservation of their capital and have little desire to take risks, so many investors ran to securities they deemed "safe" in fear of losing everything.

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