Question 4 of 9
What is the difference between a Price Return Index (PRI) and a Total Return Index (TRI)?
A
PRI includes dividends reinvested, while TRI does not.
B
TRI includes dividends reinvested, while PRI does not.
C
PRI is used for equity schemes, while TRI is used for debt schemes.
D
There is no difference between PRI and TRI.
Correct Option:
B
Explanation
A Price Return Index (PRI) measures only the change in the prices of the constituent securities and excludes dividends. A Total Return Index (TRI) assumes that dividends are reinvested in the index, providing a more comprehensive measure of the total return generated by the underlying securities.
