Constance Is an Investment Adviser Representative

Constance is an investment adviser representative. She told one of her clients that he should put at least 15% of his investment monies in a U.S. government bond mutual fund.
She explained that she believed that he required this percentage to meet his liquidity needs, and U.S. government bond funds are risk-free. A few months later, the client needed to sell some of his fund shares in order to pay some medical bills and was surprised to discover that he lost money on the sale because the net asset value of the fund had dropped. Was Constance guilty of any securities violations?

A) Yes. Constance is guilty of fraud. She misled the client into thinking he couldn't lose any money if he invested the money in a U.S. government bond mutual fund.
B) Yes. Constance should never recommend that a client invest such a high percentage of his investment monies in a U.S. government bond mutual fund.
C) No. U.S. government bonds are often referred to as risk-free investments, so Constance made no misstatement of fact in telling her client this.
D) It depends. If Constance realized that the client could lose money in a U.S. government bond fund, then she is guilty of fraud, but if she did not herself realize that, then she is merely misinformed.