Canadian Securities Course (CSC) Level 2 Practice Exam

What is the typical order of funds from highest to least return/risk?

1. Fixed income, specialty, money market, equity, balanced

2. Specialty, equity, balanced, fixed income, money market

3. Equity, money market, fixed income, balanced, specialty

4. Balanced, fixed income, money market, specialty, equity

The correct answer is: Specialty, equity, balanced, fixed income, money market

The correct order of funds from highest to least return/risk is Specialty, Equity, Balanced, Fixed income, Money market. Specialty funds typically have the highest return potential but also come with the highest level of risk due to their concentrated focus on a specific sector or strategy. Equity funds come next in terms of return and risk, as they invest in stocks and provide the potential for high returns but also carry significant risk. Balanced funds offer a mix of stocks and bonds, providing a balance between return potential and risk. Fixed income funds invest in bonds and offer lower returns but also lower risk compared to equity funds. Money market funds are the least risky but also offer the lowest returns among the fund types listed.