Matching Mutual Funds with Investor Needs. This chapter classified mutual funds into different categories based on the nature of the fund’s investments. Using the following information, pick a mutual fund category that you consider suitable for each investor described and justify your choice.

a. A 23-year-old single investor with a new job that pays $48,000 a year.

Mutual fund category: _______ Why? _______

b. A 45-year-old single parent with three children who has just received a $450,000 divorce settlement, has no job, and has not worked outside the home for the past five years.

Mutual fund category: _______ Why? _______

c. A husband and wife who are both in their late 60s and retired.

Mutual fund category: _______ Why? _______ LO16-2