Bonds and Funds Investments Activity

Directions: You are a financial advisor for a local bank. You have multiple clients with varying interests. For each of the scenarios below, choose the correct letter of the corresponding type of bond or fund that would best fit the situation of your clients.

Types of Bonds

A. Municipal bond

B. US Savings Bonds

C. Treasury Bills and Notes

D. Corporate Bonds

E. Mutual Funds

F. Exchange-traded funds

Scenarios

____ 1. Thomas wants to invest his money into a fund that he would be able to see

real-time gains and losses, as well as invest his money into a variety of

technology stocks and bonds.

_____ 2. Julie would like her money to be invested in something that would help her

community build new schools and parks.

_____ 3.LabMix needs to raise money for an expansion of their business by offering

an investment in their company. The investments would be paid back in 5 years. Larry wants to be a lender to LabMix.

_____ 4.Alexa has mentioned that she wants her investment to be both bonds and

stocks, as well as her dividends she earns to be reinvested. She would like a variety of companies to be included in her investment.

_____ 5. Kevin has asked for his money to be invested safely. He would like to buy

something at half the face value and be guaranteed that he will make a profit on his investment in the future. He does not mind having his money invested for many years but understands that his return will depend on current interest rates.

_____ 6. Tia wants to invest her money with the federal government but have it earn

interest within a year.

The Right Type of Mutual Fund Activity

Directions: Match the mutual fund in the left-hand column with the most appropriate situation in the right-hand column by placing the letter representing the situation next to the mutual fund.

Type of mutual fund / Situation to use mutual fund
  1. Aggressive–growth stock funds ______
/ A. Ben wants to invest in primarily in stocks from other countries such as Japan, India, China, South Africa, and Australia.
  1. Income funds ______
/ B. Tish wants help in investing in companies that specialize in the entertainment industry.
  1. International funds ______
/ C. Ted wants a portfolio that consists of him owning shares and loaning money.
  1. Sector funds ______
/ D. Mary, a high school senior, wants high dividends on a mutual fund investment for a period of one to four years. She plans to use the money for a trip abroad for three months after graduating from college. She is willing to risk her entire savings of $5,000.
  1. Bond funds ______
/ E. Jack prefers to receive pay regularly from his investments.
  1. Balanced funds ______
/ F. Ann wants to invest in a portfolio that consists primarily of companies such as Verizon, Humana, and General Electric.