Unit Investment Trust Funds (UITF) Practice Exam 2026 - Free UITF Practice Questions and Study Guide

The correct choice reflects the ethical and operational considerations of trust entities in handling additional income derived from corporate actions. Trust entities are essentially fiduciaries, meaning they have a legal and ethical obligation to act in the best interest of their clients. In the context of additional income from corporate actions, it is crucial that clients are informed and consenting to how such income is managed or distributed.

When a trust entity receives income from corporate actions, they must typically communicate this income to clients, ensuring transparency regarding any financial gains. Choices that imply taking income without client acknowledgment or distributing it without client consent disregard this fiduciary responsibility. In some instances, the entity may retain a portion of the income for administrative fees or other legitimate expenses, but this should always be done with full disclosure to the clients. Therefore, the trust entity's role is to inform clients about income and obtain their approval on how it is handled.