Which of the following lists mutual fund types from lowest potential risk to highest potential risk?
A) balanced < index < sector < money market
B) index < balanced < money market < sector
C) money market < index < balanced < sector
D) sector < index < balanced < money market
E) money market < sector < balanced < index
Answer: C
Explanation: C) Money market funds are very conservative and low risk. Index funds reflect long-term averages of a market index and are considered lower risk. Sector funds invest in one particular industry and can be high risk based on various factors impacting the industry.
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