Question 4 of 8
In the case of mutual fund schemes, dividends can be paid only out of
A
Premium reserve account
B
Unit capital
C
Distributable surplus generated by the scheme
D
Mark-to-market profits
Correct Option:
C
Explanation
Mutual fund dividends may be paid only from the distributable surplus generated by the scheme, subject to applicable regulations. Unit capital cannot be used for dividend distribution, as doing so would amount to returning investors' capital rather than distributing earned surplus.
