A client approaches you seeking an investment that provides stable returns, high liquidity, and minimal risk to capital. Their primary goal is to preserve capital while earning a modest return, as they anticipate needing the funds for a down payment on a house within the next 12 months. Which type of mutual fund would be most suitable for this client's immediate need?

Question: A client approaches you seeking an investment that provides stable returns, high liquidity, and minimal risk to capital. Their primary goal is to preserve capital while earning a modest return, as they anticipate needing the funds for a down payment on a house within the next 12 months. Which type of mutual fund would be most suitable for this client's immediate need?

Answer options: ✅ Money Market Fund

• Canadian Equity Fund
• High-Yield Corporate Bond Fund
• Global Balanced Fund

Correct answer: Money Market Fund

Explanation: Money Market Funds invest in short-term debt instruments and are designed to provide high liquidity, capital preservation, and modest returns, making them suitable for clients with short-term financial goals.