Sharon Tate has a mutual fund and she has all dividend income and capital gains income used to purchase additional shares in her mutual fund. Which of the following plans is she using?

A) A voluntary savings plan

B) A reinvestment plan

C) A regular account transaction

D) A contractual savings plan

A reinvestment plan is a program that allows investors to reinvest their gains (usually dividends) in more shares of the same corporation or mutual fund. Even though investors do not cash their dividends, they must still pay taxes for them.

In this case, Sharon is using her dividend cash payments purchase more stocks of the same mutual fund.

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Sharon Tate has a mutual fund and she has all dividend income and capital gains income used to purchase additional shares in her mutual fund. Which of the following plans is she using? A) A voluntary savings plan B) A reinvestment plan C) A regular account transaction D) A contractual savings plan

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