Final answer:
Equity mutual funds primarily invest in stocks and may hold a small percentage of fixed-income securities for diversification. They do not typically hold money market securities.
Step-by-step explanation:
Equity mutual funds are investment funds that primarily invest in stocks. They aim to provide investors with long-term capital appreciation by investing in a diversified portfolio of stocks. Therefore, statement I is true.
However, it is not accurate to say that equity mutual funds do not hold fixed-income securities. While their primary focus is on stocks, some equity mutual funds may include a small percentage of fixed-income securities in their portfolios to diversify their holdings and manage risk. Therefore, statement II is false.
Regarding statement III, most equity mutual funds do not hold money market securities. Money market securities are short-term, low-risk debt instruments, and they are typically held by money market funds rather than equity mutual funds.