CSI CSC2 Exam - Topic 5 Question 11 Discussion

Actual exam question for CSI's CSC2 exam

Question #: 11
Topic #: 5

If a mutual fund is set up as a corporation, how much of income generated by the fund flows through directly to the shareholders?

A100% of dividends

B100% of interest

CNone

D50% of capital gain

Show Suggested Answer

Suggested Answer: A

by Louvenia at Mar 06, 2026, 08:29 AM

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Jutta

15 days ago

Totally agree with A! Dividends flow through.

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Kristine

20 days ago

I thought it was C) None. Seems off.

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Lonny

26 days ago

A) 100% of dividends is correct!

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Pearlie

1 month ago

I disagree, it’s not just dividends that flow through.

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Hillary

1 month ago

Wait, really? I didn't know that about mutual funds!

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Cordelia

1 month ago

Definitely A) 100% of dividends!

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Julian

2 months ago

I thought it was C) None? That seems off.

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Gladys

2 months ago

A) 100% of dividends is correct!

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My

2 months ago

I thought all income types were taxed at the corporate level first, so I'm leaning towards C as well, but I wish I had more clarity on that.

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Kristel

2 months ago

I recall a practice question about capital gains and how they might be treated, but I can't remember if it's 50% or something else.

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Sina

2 months ago

I feel like we discussed how dividends are taxed differently, but I'm not sure if that means they flow through 100%.

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Ocie

2 months ago

I think I remember that mutual funds as corporations don't pass through income directly to shareholders, so maybe it's C?

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