 Life Insurance - expense ◦ Owner ◦ Annuitant ◦ Beneficiary  Back-end load  Aftertax deposits

 “Wrap account”  Fixed  Variable ◦ Investment accounts  Management fees, other expenses

 Accumulation  Withdrawal ◦ Periodic withdrawal ◦ Life ◦ Life with period certain ◦ Life with refund option ◦ Joint and last survivor ◦ Fixed period ◦ Fixed amount

 Aftertax deposits (tax on withdrawal)  Tax deferred  59 ½ withdrawal (10% penalty)  Never ( %) in a retirement account  Probably last investment choice ◦ High tax individuals  Average of 2.37% annual expenses

11/11/12

 Maturity < 1 year  Pure discount securities  Started because of Regulation Q ◦ pre 1980  NAV = $1 ◦ not guaranteed ◦ May change to variable rate NAV  Check writing Money Market Funds

 Treasury bills  Commercial paper  Jumbo CDs – Negotiable CDs  Eurodollar CDs  Banker’s Acceptances  Repurchase agreements (Repos) Money Market Securities

 US Treasury  US government  General  Tax-free Types

 “Breaking the buck” ◦ 2008 ◦ Reserve US Government fund ◦ Treasury set up insurance program like FDIC  Inflation  Income risk – changing returns MM Risks

 Short-term, safe investment  Cash alternative  Liquidity MM uses

  MM Information

 Expenses, expenses, expenses  Turnover not important ◦ No capital gains What to Look For

 Floating NAV  Fund can impose a liquidity fee ◦ If liquidity falls below a specific level, redemptions are suspended. New Rules?