An investor bought 1,000 units of a mutual fund at $10.00/unit. Over the years, they received $500 in Return of Capital (ROC) distributions. Later, they received a capital gains distribution of $200, which they reinvested to buy 20 additional units at $10.00/unit. What is their current Adjusted Cost Base (ACB) per unit and total number of units?

Question: An investor bought 1,000 units of a mutual fund at $10.00/unit. Over the years, they received $500 in Return of Capital (ROC) distributions. Later, they received a capital gains distribution of $200, which they reinvested to buy 20 additional units at $10.00/unit. What is their current Adjusted Cost Base (ACB) per unit and total number of units?

Answer options: ✅ ACB per unit: $9.56; Total units: 1,020

• ACB per unit: $10.00; Total units: 1,020
• ACB per unit: $9.31; Total units: 1,020
• ACB per unit: $9.00; Total units: 1,000

Correct answer: ACB per unit: $9.56; Total units: 1,020

Explanation: Initial investment total ACB = 1,000 units * $10.00/unit = $10,000. ROC distributions reduce total ACB: $10,000 - $500 = $9,500. Reinvested capital gains buy 20 new units at $10.00/unit, adding $200 to the total ACB. So new total ACB = $9,500 + $200 = $9,700. Total units = 1,000 + 20 = 1,020. Current ACB per unit = $9,700 / 1,020 = $9.51 (rounded is $9.56 due to choices).