IFIC Mutual Funds Licensing Practice Exam · Question
Which of the following is crucial for establishing the Adjustable Cost Base (ACB) of mutual fund units in a non-registered account?
The ACB for mutual fund units in a non-registered account is the average cost of all units owned. It includes all purchase costs and the cost of any units acqui
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Question: Which of the following is crucial for establishing the Adjustable Cost Base (ACB) of mutual fund units in a non-registered account?
Answer options:
- The fund's MER each year.
- The total value of all distributions received. ✅ The total cost of all units purchased, including any reinvested distributions.
- The highest price at which any unit was ever purchased.
Correct answer: The total cost of all units purchased, including any reinvested distributions.
Explanation: The ACB for mutual fund units in a non-registered account is the average cost of all units owned. It includes all purchase costs and the cost of any units acquired through reinvested distributions. It is critical for calculating capital gains or losses upon redemption.
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