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Question: Are investments in mutual fund units risk-free or safe?

Answer: This depends on the underlying instrument that a mutual fund invests in, based on its investment objectives. Mutual funds that invest in stock market-related instruments cannot be termed risk-free or safe as investment in shares are inherently risky by nature, whereas funds that invest in fixed-income instruments are relatively safe and those that invest only in government securities are the safest.



Category Mutual Funds Interview Questions & Answers - Exam Mode / Learning Mode
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Question: Are investments in mutual fund units risk-free or safe?
Answer:

This depends on the underlying instrument that a mutual fund invests in, based on its investment objectives. Mutual funds that invest in stock market-related instruments cannot be termed risk-free or safe as investment in shares are inherently risky by nature, whereas funds that invest in fixed-income instruments are relatively safe and those that invest only in government securities are the safest. Source: CoolInterview.com



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