Multiple choice

Which of the following investment options does not give the benefit of compounding?

  1. Growth option

  2. Dividend payout option

  3. Dividend Reinvestment option

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dividend payout does not give compounding benefits because dividends are paid out to the investor. Growth (A) and dividend reinvestment (C) both compound - growth keeps funds invested, reinvestment uses dividends to buy more units.

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