Maria Owns 500 Units in a Mutual Fund That Invests

Multiple Choice

Maria owns 500 units in a mutual fund that invests exclusively in bonds issued by Canadian public corporations. During 2020 the mutual fund received bond interest and paid income distributions of $1.12 per unit. Maria reinvested all of her distributions. The effect on Maria's 2020 Taxable Income is:

A) Increase of $280.
B) Increase of $560.
C) Increase of $773.
D) $0 because the distributions were reinvested.