Multiple choice

The difference between change in NAV method and total return as measures of fund performance is

  1. none

  2. total return method takes dividend into account while change in NAV does not

  3. total return method does not take NAVs into account

  4. total return method does not take the time period into account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The total return method incorporates both NAV changes AND dividend distributions, while the NAV change method only tracks price appreciation. This makes total return more comprehensive, especially for income funds where dividends represent a significant portion of investor returns.

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