=+35. Bond funds. Morningstar (www.morningstar.com) selects mutual funds as “Medalist” funds expected to perform well over the long term. You have decided to invest in a bond fund and plan to limit your choice of funds to Morningstar “medalist” funds. But now you must choose M13_SHAR8696_03_SE_C13.indd 456 14/07/14 7:30 AM Exercises 457 between a taxable fund and a municipal bond fund that is at least partially tax-free. Which is better? Here are the

% returns for the three-year period leading up to spring of 2013:

Taxable bond funds 10.83, 6.45, 8.52, 10.9, 4.16, 10.48, 6.07, 2.69, 1.24, 1.58, 4.02, 5.64, 6.29, 12.36 Municipal bond funds 8.34, 7.3, 6.07, 6.46, 5.77, 5.89, 5.76, 5.81, 5.12, 5.63 4.71, 5.22, 5.21, 3.12, 4.77, 2.2