A capital gain distribution is the profit that results from an increase in value when the investors sell their shares in a fund.

Question

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A capital gain distribution is not the profit that results from selling shares in a fund. Rather, it is a distribution of profits made by the fund that are passed on to the shareholders. These profits are typically generated from the sale of assets held by the fund, such as stocks or real estate.

A Capital Gain Distribution Is the Profit That Results from an Increase