What happens if a fund’s shadow price rises above $1.0050 or falls below $0.9950?
If a fund’s shadow price rises above $1.0050 or falls below $0.9950, the fund’s board must promptly consider what action, if any, should be taken, including whether to discontinue the use of amortized cost valuation and reprice the fund’s NAV to be more or less than $1.00. Repricing the NAV is known as “breaking the dollar” or “breaking the buck.” The board may also consider whether to suspend redemptions and liquidate the fund.
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