The correct answer is D. More risk than a dividend fund, but less risk than an equity fund . The Investment Funds in Canada curriculum explains that mortgage funds invest primarily in residential and commercial mortgages, generating income from interest payments.

Mortgage funds carry credit risk, interest rate risk, and liquidity risk , making them riskier than traditional dividend or fixed-income funds, which often hold publicly traded securities. However, they are generally less volatile than equity funds , which are subject to broader market fluctuations and business risk.

Dividend funds typically invest in established companies with stable cash flows and are therefore less risky than mortgage funds. Equity funds expose investors to full market risk and price volatility, placing them at a higher risk level than mortgage funds.

The CIFC course places mortgage funds in the mid-risk spectrum , between income-oriented equity funds and growth-oriented equity funds. Therefore, Option D is the correct and fully CIFC-verified answer.