1.3. Investment companies attempt to explain to investors the nature of the risk the investor incurs when...

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1.3. Investment companies attempt to explain to investors the nature of the risk the investor incurs when buying shares in their mutual funds. For example, Vanguard carefully explains interest-rate risk and offers alterna- tive funds with different interest rate risks. Go to https://personal.vanguard.com/us/funds.

a. Select the bond fund you would recommend to an investor who has a very low tolerance for risk and a short investment horizon. Justify your answer.

b. Select the bond fund you would recommend to an investor who has a very high tolerance for risk and a long investment horizon. Justify your answer.

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