Ch.5 · NFO Process and Rules · hard
Why did SEBI mandate the use of Total Return Index (TRI) as benchmark instead of Price Return Index (PRI)?
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EXPLANATION
The Total Return Index (TRI) includes dividend reinvestment in addition to price appreciation, while the Price Return Index (PRI) only tracks price changes. Since mutual funds also earn and reinvest dividends from portfolio stocks, comparing fund returns with TRI provides a fairer, more accurate benchmark comparison than PRI.
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