The interest and dividends that a mutual fund earns on its investments are paid out to shareholders as capital gains distributions.

Question

Quizplus · Accepted Answer

The interest and dividends that a mutual fund earns on its investments are typically paid out to shareholders as dividend distributions, not capital gains distributions. Capital gains distributions are made from the profits of selling securities in the fund's portfolio at a gain.

The Interest and Dividends That a Mutual Fund Earns on Its