What is the major difference between mutual funds and certificates of deposit? How are mutual funds and certificates of deposit alike? What is the major difference in bonds and treasury notes, and which would you prefer as an investor? How are bonds, treasury notes, mutual funds alike?

Mutual funds differ from CDs in a multitude of ways. Mutual funds are diversified portfolios of stocks and bonds managed by a financial advisor or broker. They typically offer substantially higher returns than CDs, and while they are riskier than CDs, they are not considered high risk investments.

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