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

In which of these options will the unit balance increase in the mutual fund investor's folio without any transaction being done by the investor?

Practice question from NISM Series V A - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Redemption

  2. Dividend Reinvestment option

    Correct answer

  3. C

    Dividend Payout option

  4. D

    Growth option

Why this is the answer

In the dividend reinvestment option, the dividends are not paid out to the investor but are used to buy additional units in the same mutual fund scheme, thereby increasing the investor's unit balance.

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