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

Mutual funds today are benchmarked to the Total Return variant of an Index (TRI) and not to the Price Return variant of an Index (PRI). What is the advantage of TRI over PRI?

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

Options

  1. A

    It ensures that the performance comparison is fair

  2. B

    Increases transparency

  3. Both A and B

    Correct answer

Why this is the answer

The Total Return Index (TRI) includes dividends and interest payments along with capital gains, making performance comparisons more accurate and transparent. PRI only considers capital gains, so it doesn’t capture the full return.

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