Renee wants to invest in a bond fund. She is a very conservative investor with a high marginal tax rate. Which one of the following types of bond funds might be most suited for her situation?

Question

Quizplus · Accepted Answer

The most suitable bond fund for Renee would be a short-term municipal bond fund. This is because municipal bonds offer tax advantages to investors, particularly those in high marginal tax brackets such as Renee. Short-term municipal bond funds also provide stability, which is in line with Renee's conservative investment style. High-yield corporate, long-term world, single-state corporate, and mortgage bond funds are all riskier and may not be suitable for a conservative investor like Renee.

Renee Wants to Invest in a Bond Fund