CMA Final · Strategic Financial Management · Mutual Funds
A fund starts with 1,00,000 units at an NAV of ₹30. It then sells 20,000 new units at the prevailing NAV after the fund's portfolio value rises to ₹33,00,000 (liabilities nil). What is the NAV per unit at which the new units are sold, and the fund's total net assets after the sale?
New units are sold at the current NAV of ₹33, being ₹33,00,000 divided by 1,00,000 units. The 20,000 units raise ₹6,60,000, so net assets become ₹39,60,000. NAV remains ₹33 after the sale.
- A₹33.00; ₹39,60,000Correct
- B₹30.00; ₹36,00,000
- C₹33.00; ₹36,00,000
- D₹32.00; ₹38,40,000
Explanation
NAV before sale = 33,00,000/1,00,000 = ₹33. New units raise 20,000 × 33 = ₹6,60,000. Net assets = 33,00,000 + 6,60,000 = ₹39,60,000. Using ₹30 ignores the rise in value.
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