Taxable money funds invest in a variety of debt instruments and securities.  The reason money funds are so stable is because they invest in ultra short-term securities like those issued by banks, the federal government, state municipalities and large companies with top grade credit ratings.  There are a variety of different debt instruments in the money market, offering different returns and different risks for the money market fund.  The investments are all short-term, very liquid investments with high credit quality.  The most common types of money market instruments purchased by money market funds generally include commercial paper, Treasury bills, Federal Agency securities, Eurodollar deposits, repurchase agreements, certificates of deposit, and bankers acceptances.

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