Question

5 rachel is 38 years old and has $50,000 in her savings account. she wants to invest her savings to generate funds to use as a down payment for purchasing a home in 10 years. rachel would like to invest in a fund that offers growth and safety. she is thinking of investing in stocks for the growth potential it offers. however, she also prefers the more stable returns from bonds. which of the following investments will be a suitable recommendation for rachel?
a. mutual funds
b. money market funds
c. balanced funds
d. equity funds

Explanation:

and stability (from bonds). Mutual funds can have various compositions, money market funds are very stable (low growth), equity funds are mostly stocks (high growth, less stability). Balanced funds invest in both stocks (for growth) and bonds (for stability), matching her needs.

Answer:

c. Balanced funds