Not exact matches
It offers the potential to earn more
money than, say, a bank certificate of deposit or a
money market account, and the index options give the client some flexibility in how much downside
risk there will be.
Now I have another fund which is in P2P funds which is higher
risk than a deposit
account but then gives me a better return and is less subject to
market fluctuations and it would be the place I go to for loss of job level emergencies say 6 months of salary, this takes a bit longer to access but given I have the above emergency fund I have given myself time to get the
money from the P2P
account.
So
money market funds can be higher
risk than saving
account mutual funds.
That is why your textbook feels the need to add the qualifier «for practical purposes,» meaning that the
risk of a
money market account is so much lower
than virtually any other asset class that it can reasonably be approximated as
risk free.
Cash, savings
accounts,
money market accounts and high - yield savings
accounts are all liquid, accessible and extremely low -
risk, but some options are better
than others.