ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If you are worried that mutual funds are a type of flight-by-night scheme, then rest assured that mutual funds are completely safe.

Detailed explanation-2: -Mutual funds are largely a safe investment, seen as being a good way for investors to diversify with minimal risk. But there are circumstances in which a mutual fund is not a good choice for a market participant, especially when it comes to fees.

Detailed explanation-3: -Since mutual funds also invest in debt instruments such as corporate bonds and debentures, asset risk is very much a part of it.

Detailed explanation-4: -All funds carry some level of risk. With mutual funds, you may lose some or all of the money you invest because the securities held by a fund can go down in value. Dividends or interest payments may also change as market conditions change.

Detailed explanation-5: -All investments carry some risk, but mutual funds are typically considered a safer investment than purchasing individual stocks. Since they hold many company stocks within one investment, they offer more diversification than owning one or two individual stocks.