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Options
- A
Index Funds
-
Diversified Equity Fund
Correct answer
- C
Long Duration Funds
- D
Gilt Funds
Why this is the answer
Equity funds are inherently riskier than debt-oriented funds such as gilt funds and long duration funds, which primarily face interest rate risk. Within equity categories, index funds invest in large-cap companies from benchmark indices, making them relatively more stable. In contrast, diversified equity funds invest across large, mid, and small-cap stocks, where mid and small-cap exposure increases volatility and risk. Hence, diversified equity funds carry the highest risk among the given options.
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