Risk profile and mutual fund investments

The risk profile is the combination of your ability and your willingness to take the risk. Simply put, it measures how much risk you are able to take (based on quantitative terms) and how much risk you are ready to take (based on qualitative terms). But how does it really matter while investing in mutual funds?
 
Even the disclaimer of mutual funds goes like “Mutual funds are subject to market risks. Please read your offer document carefully before investing”. So mutual funds do carry risk. However, the severity of the risk varies depending on the securities or instruments held by a particular mutual fund.

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