1. What are the types of mutual funds that would be appropriate in meeting Mahalia's objective?
2. What sources could Mahalia use to obtain specific information and ratings on different funds?
3. When reviewing a fund's prospectus or an analysis provided by Morningstar, for what specific type of information should Mahalia look?
4. When evaluating a fund, how much importance should Mahalia place on a fund's past performance?
5. Given Mahalia's goal and your response to Question 1, how important are loads, fees, and expenses in her search for a good mutual fund?
6. Provide Mahalia with six reasons why she should consider purchasing shares in a bond fund.
7. What type of bond fund would you recommend? Why?
8. In terms of the risk-return trade-off, what length of maturity for a bond fund would be appropriate for Mahalia?
Mahalia has decided that she needs to invest her savings somewhere other than a bank account where she is earning only 1.25 percent annually. She has heard that money market mutual funds and short-term bond funds may provide higher yields than bank accounts and offer stability of principal similar to the bank. Mahalia's primary investment goal is to keep her savings (about $15,000 when she last checked) secure and accessible so that she can make a down payment on a house within the next 3 years. She has several questions regarding invest¬ing in mutual funds and has come to you for help.