Hi,
-The correct answer should be answer "B." "A money market mutual fund has slightly greater risk than a savings account."
Money market mutual funds and savings accounts are both types of financial products that offer a safe place to deposit money and earn interest. However, there are some differences in terms of risk.
Savings accounts are typically offered by banks and are insured by the Federal Deposit Insurance Corporation (FDIC) in the United States. This means that even if the bank fails, your deposits are protected up to a certain amount (currently $250,000). Savings accounts are considered very safe because of this guarantee.
On the other hand, money market mutual funds are investment products offered by financial institutions. While they also invest in relatively safe assets like short-term government bonds and certificates of deposit, they are not insured by the FDIC. This means that if the investments made by the fund perform poorly, there is a risk that you could lose some of your principal investment.
It's important to note that the risk of money market mutual funds is generally low, but it is slightly higher than the risk associated with savings accounts. The exact level of risk can vary depending on the specific investments made by the fund and the overall market conditions.
In summary, while both money market mutual funds and savings accounts are relatively low-risk options for storing your money, money market mutual funds carry slightly greater risk due to the nature of their investments and lack of FDIC insurance.
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