Money you set aside for a "rainy day fund" should be invested in ________, while money you are saving for retirement in 20 years should be invested in ________.
A) mutual funds; bond funds
B) money market funds; growth-oriented stock mutual funds
C) three-year bank CDs; 20-year bank CDs
D) preferred stock; common stock

Question

Quizplus · Accepted Answer

Money for a "rainy day fund" should be easily accessible and preserved, making money market funds a suitable choice due to their liquidity and stability. For long-term goals like retirement, growth-oriented stock mutual funds are appropriate as they offer the potential for higher returns over time, compensating for their higher risk compared to more conservative investments.

Money You Set Aside for a "Rainy Day Fund" Should