VALUE-AT-RISK IN MUTUAL FUNDS WHICH METHODOLOGY OF ESTIMATION
The tax-exempt money market is more complex than the taxable money
market. That’s largely because of a supply-and-demand imbalance for very
short-term municipal securities. There’s a high level of demand for these
issues—much of it coming from individuals who want to minimize their tax
bill by placing their cash in a tax-exempt money market mutual fund. But
supply is limited. States and municipalities generally prefer to issue longer-
term securities, since the money raised is normally used to support long-
lived projects such as roads or buildings or ongoing obligations, including
the salaries of public employees. To provide a bridge between lenders and
borrowers, a large derivatives market that...