1. Explain the relative risk of the various types of securities in which a money market fund may invest.
2. Interest Rate Risk of Funds: Is the value of a money market fund or a bond fund more susceptible to rising interest rates? Explain.
3. What is the rate of return required to accumulate $400,000 if you invest $10,000 per year for 20 years? Assume all payments are made at the end of the period.