Earnings on pooled investments and changes in fair value of investments are allocated to the participants having an equity interest in the pool in proportion to their relative contributions to the pool.

Question

Quizplus · Accepted Answer

This statement is describing the principle of proportionate sharing, which is a fundamental concept in pooled investment arrangements. Earnings and changes in fair value are distributed among participants based on their contributions, which helps to ensure that each investor receives a fair return on their investment.

Earnings on Pooled Investments and Changes in Fair Value of Investments