Question 1 of 9
________ takes into account all dividends generated from the basket of constituents that make up the index in addition to the capital gains.
A
Total Return Index
B
Price Return Index
C
Dividend Return Index
D
All of the above
Correct Option:
A
Explanation
A Total Return Index (TRI) includes both capital appreciation and the reinvestment of dividends paid by the constituent securities. As a result, it provides a more accurate measure of the total return earned from the underlying portfolio than a Price Return Index (PRI).
