2. Mutual funds are investments in securities – such as bonds, stocks, etc. – that pool money from multiple investors. The investments are controlled by managers. Anyone can invest in a mutual fund but the common investors are low risk takers. The cost of a mutual fund will depend on what type you have and the fees you pay. Money market funds tend to be the safest and least expensive. http://en.wikipedia.org/wiki/Mutual_fund http://www.investopedia.com/university/mutualfunds/ http://www.essortment.com/all/howtoinvestmo_rguq.htm

3. Portfolio: a portfolio is comprised of the multiple investments made Net Asset Value: net asset value is the current market’s value of a fund’s holdings Diversification: diversification is the investment in one fund to receive instant access to a diversified portfolio, rather than buying individual securities that could expose a risk Liquidity: liquidity refers to the amount of time it takes to receive the earnings from selling a mutual fund. 7 days is the maximum limit Dividends and interest: dividends are portions of a company’s earnings that are given to shareholders and interest is a form of income from deposited funds http://www.investopedia.com/terms/d/dividend.asp http://money.howstuffworks.com/personal-finance/financial-planning/mutual-funds.htm

4. Mutual funds can be bought through banks, brokers, financial planners, insurance agencies, or by directly contacting the fund. When selling a mutual fund, find a copy of your latest statement and call customer service to inform them that you’d like to liquidate your shares. You can receive the earnings through direct transfer or request a check. http://www.sec.gov/investor/pubs/inwsmf.htm http://www.ehow.com/how_7337665_rid-mutual-fund.html

5. Money Market Funds: pay dividends that generally reflect short-term interest rates. They try to keep their net asset value at a stable $1.00 per share. Bond Funds: have higher risks than money market funds but are not restricted to high- quality or short-term investments Stock Funds: prices can rise and fall quickly but overall, stocks perform better than other investments http://www.sec.gov/investor/pubs/inwsmf.htm

6. Stocks are shares of a company. They give part of the ownership of a company to the share-holder. Bonds are essentially loans to a company or corporation. The institution will give you a receipt for your loan along with guaranteed interest. http://ezinearticles.com/?Stocks-VS-Bonds---Differences-and-Risks&id=924077

7. Mutual funds are open-ended funds. You can buy as many shares as desired at one time. Closed-end funds will only sell a fixed number of shares at one time. Unit Investment Trusts (UITs) make a one-time public offering of only a specific, fixed number of redeemable securities. They will buy back an investor’s units at the investor’s request. It does not actively trade its investment portfolio. http://www.sec.gov/investor/pubs/inwsmf.htmhttp://www.sec.gov/answers/uit.htm

8. Advantages: Mutual funds offer diversity, are professionally managed, and come in many varieties Disadvantages: Mutual funds have hidden fees and high sales charges, they lack liquidity, and are not insured

9. There are fees of investing in mutual funds. They are management fees that pay fund companies to manage the mutual funds. It’s important to remember that mutual funds are not insured by the Federal Deposit Insurance Corporation (FDIC) or government agencies, even if they are issued by a bank. There is always a risk when investing in mutual funds. http://mutualfunds.about.com/od/mutualfundbasics/a/mutualfund.htm

10. 1.What exactly are mutual funds? 2.What is liquidity? How is it related to mutual funds? 3.Why are bond funds more risky than money market funds? 4.Who are mutual funds insured by? 5.Where can mutual funds be purchased?

11. 1.Mutual funds are pools of investments in securities. 2.Liquidity is the amount of time it takes to receive the earnings after selling a mutual fund. 3.Bond funds are more risky because they are not restricted to high-quality or short-term investments. 4.Mutual funds aren’t insured; not by the FDIC, banks, or government agencies. 5.They can be purchased at banks, through brokers, insurance agencies, financial planners, or directly from the fund.