Question 2 (15 pts)

IMPORTANT:Before answering this question, please read the Mutual funds lesson on CNN Money, money.cnn.com. The link is below. Make sure to read all the pages in the lesson by following the links at the bottom of the page.

http://money.cnn.com/pf/money-essentials-mutual-funds/index.html

I also expect you to use sites such as Yahoo Finance to further research what "index" funds are, and what "Load" funds are.

Here are 3 funds that were recommended to you by a financial advisor. Your job is to analyze each one and answer the questions below.

	FUND 1	FUND 2	FUND 3
Description	This fund invests in stocks of large companies, and its goal is track the S&P 500. It imposes a commission, and is sold through brokers.	This fund invests in companies with a history of paying dividends. It is an "Equity-Income fund". It does not impose a sales commission. The fund's managers try to choose stocks that will beat the S&P 500 index	This fund's invests in foreign stocks but does not employ a fund manager. It seeks to track a foreign stock index. It does not impose a sales charge.
Expense ratio	0.3 %	1.8 %	2.5%
Load or No Load fund? Please answer as "Load" or "No Load"	_____ (1 pt)	_____ (1 pt)	_____ (1 pt)
Managed or Index fund?	_____ (1 pt)	_____ (1 pt)	_____ (1 pt)

1. What are some advantages / positives (if any) of fund #1? Are there any disadvantages/negatives? (3 points)

2. What are some advantages / positives (if any) of fund #2? What are some disadvantages/negatives (if any)? (3 points)

3. What are some advantages / positives (if any) of fund #3? What are some disadvantages/negatives (if any)? (3 points)