Redemption is calculated from which dates?

• A. From month of sale to month of redemption
• B. From month of sale to month following sale
• C. From the month of sale to the month of redemption
• D. From month of sale to the end of the calendar year

Answer: (C)

Redemption calculations hinge on the actual holding period measured in months, starting with the month the sale is executed and ending with the month the redemption occurs. This way, the entire time the funds were invested is captured, including both the sale month and the redemption month. For example, if you sell in January and redeem in March, the holding period includes January, February, and March. Counting only up to the following month would understate the time the funds were tied up, and using the end of the calendar year could misstate the period if redemption happens earlier in the year. Thus, the period from the month of sale to the month of redemption best reflects the true holding time for calculating redemption.