What is an advantage of a Unit Paying Fund?

Unit Paying Funds are designed to provide investors with regular income distributions, making option B the correct choice. These funds typically generate income through dividends or interest from the underlying investments, and then pass a portion of that income directly to unit holders. This is particularly advantageous for investors who rely on periodic income, such as retirees or those looking to supplement their cash flow.

Income distributions can help in budgeting and financial planning, giving investors certainty and predictability in their cash inflows. Moreover, receiving income from the fund can allow investors to reinvest in the fund, diversify their portfolio, or manage any immediate expenses.

In contrast, the other provided options focus on growth potential, fees, and market risk, which are not the defining features of Unit Paying Funds. High growth potential through reinvestment is more characteristic of growth-focused funds that do not distribute income. Lower fees may vary among different funds and are not a specific advantage of Unit Paying Funds per se. Reduced market risk exposure aligns more with risk management strategies than with the income-focused nature of Unit Paying Funds.