Question

ank the following fund categories from likely most risky to likely least risky: 1. equity growth fund 2. balanced fund 3. sector fund 4. money market fund

Answer 1

The most risky to least risky fund categories are: equity growth fund, balanced fund, sector fund, and money market fund.

Step-by-step explanation:

Riskiness of Fund Categories:

1. Equity growth fund: This fund category is considered the most risky as it invests primarily in stocks of growth-oriented companies, which can be volatile and subject to market fluctuations.
2. Balanced fund: This fund category carries a moderate level of risk as it typically invests in a mix of stocks and bonds, aiming to strike a balance between growth potential and stability.
3. Sector fund: Sector funds are more risky than balanced funds as they focus on specific sectors or industries, making them susceptible to sector-specific risks and market trends.
4. Money market fund: Money market funds are considered the least risky among the listed options. They invest in short-term, low-risk securities such as Treasury bills, offering stability and liquidity.