About Salman Khan
Salman Khan is the Founder, Executive Director, and Faculty of the Khan Academy, whose mission is to provide a free world-class education to anyone, anywhere. He has worked for both hedge funds and Fortune 500 companies and holds an MBA from Harvard Business School, where he was the president of his class. He also attended MIT, where he received three degrees: a Masters in Electrical Engineering & Computer Science, a B.S. in Electrical Engineering & Computer Science, and a B.S. in Mathematics.More Topics Explained
About CNBC Explains
CNBC Explains dissects the complicated economics of our world — everything from stocks and corporate balance sheets, to international trade and government policy. We are pleased to feature the work of Salman Khan, founder of the Khan Academy, as well as the reporting of CNBC anchors and editors. Each short video explains a complex topic using a unique digital interface and easy-to-understand style that simplifies even the most arcane topics.
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Breaking The Buck: CNBC Explains
Published:
Tuesday, 26 Jul 2011 | 4:15 PM ET
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By: CNBC Explains
In times of severe financial stress, money market funds, which are generally thought to be highly safe investments, have been said to be in danger of “breaking the buck”. The goal of money market funds is to never lose money and maintain a net asset value (NAV), or per-share value, at $1, and when their NAV goes below $1, this is called breaking the buck. But how does this really work and why is it such a rare event? Salman Khan of the Khan Academy explains.
From this video, you’ll understand:
- How Net Asset Value (NAV) is calculated for money market funds
- Events that could cause money market funds to ‘break the buck’
- How ‘breaking the buck’ is traditionally avoided
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