Question

How do mutual funds provide returns to their shareholders?

Answer 1

Answer:

Investors typically earn a return from a mutual fund in three ways: Income is earned from dividends on stocks and interest on bonds held in the fund's portfolio. Funds often give investors a choice either to receive a check for distributions or to reinvest the earnings and get more shares.

Answer 2

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Mutual funds can generate returns to their shareholders in three ways. First, they can pass on any earned income (from dividends or coupon payments) as dividend pay- ments to the shareholders. Second, they distribute the capital gains resulting from the sale of securities within the fund