Low-Risk Mutual Funds

C

The correct answer is C. Money funds.

Money funds are mutual funds that invest in short-term, high-quality debt securities, such as Treasury bills and commercial paper. They aim to maintain a stable net asset value (NAV) of $1 per share and offer investors a low-risk option for earning income. Since they invest in highly rated debt securities, they have relatively low risks compared to other mutual funds, such as stock funds, which invest in equities and have higher volatility and market risk.

Hedge funds, on the other hand, are not mutual funds and are generally only available to accredited investors due to their high-risk, high-return investment strategies. They use a variety of investment techniques, such as leveraging and short selling, to generate returns for their investors. As such, they have much higher risks compared to other mutual funds.

In summary, money funds have relatively low risks compared to other mutual funds, such as stock funds, while hedge funds have much higher risks due to their investment strategies. Therefore, the correct answer to the question is C. Money funds.