n NISM Certifications
V-A NISM Series V-A
Medium

In which of the following options does an investor receive the distribution in hand?

Practice question from NISM Series V A - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Income Distribution cum Capital Withdrawal Option only

    Correct answer

  2. B

    Income Distribution cum Capital Withdrawal Reinvestment Plan only

  3. C

    Income Distribution cum Capital Withdrawal Option and Income Distribution cum Capital Withdrawal Reinvestment Plan both

  4. D

    Growth

Why this is the answer

Most mutual fund schemes offer two options – Income Distribution cum Capital Withdrawal and Growth. A third option, possible in some cases, is the Reinvestment of Income Distribution cum Capital Withdrawal Option. Pay-out of Income Distribution cum Capital Withdrawal Option: The investor receives the dividend directly in their bank account. Re-investment of Income Distribution cum Capital Withdrawal Plan: The dividend is not paid to the investor but is reinvested in the same scheme, allotting additional units. Growth Option: No dividend is declared, and nothing is received in the bank account.

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