question archive Do you agree that investors can avoid all types of risk by purchasing a mutual fund that contains only treasury bonds?

Do you agree that investors can avoid all types of risk by purchasing a mutual fund that contains only treasury bonds?

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Do you agree that investors can avoid all types of risk by purchasing a mutual fund that contains only treasury bonds?

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Answer:

No all types of risk can not be avoided as interest rate risk will always remain because the price of Treasury bonds will fluctuate with changing interest rates. Also the purchasing power might decrease. Default risk will be minimal