CMA Final · Strategic Financial Management · Mutual Funds
A mutual fund has a portfolio worth ₹110 lakh, liabilities of ₹10 lakh and 4 lakh units outstanding. It incurs an annual expense of ₹2 lakh, already deducted in the figures given. If the fund issues 1 lakh new units at NAV, what will be the number of units and total net assets after issue?
After the issue there are 5 lakh units and net assets of ₹125 lakh. Net assets before issue are ₹100 lakh, giving NAV ₹25 on 4 lakh units. Issuing 1 lakh units at NAV adds ₹25 lakh, and NAV stays unchanged.
- A5 lakh units and ₹125 lakhCorrect
- B5 lakh units and ₹135 lakh
- C5 lakh units and ₹100 lakh
- D4 lakh units and ₹125 lakh
Explanation
Net assets = 110 − 10 = ₹100 lakh; NAV = 100/4 = ₹25. New units 1 lakh × 25 = ₹25 lakh raised. Total units = 5 lakh and net assets = 100 + 25 = ₹125 lakh. The expense is already deducted and is not subtracted again.
Did you get it right without looking?
One question tells you little. A timed set on Mutual Funds shows your real accuracy, how long you take and where you lose marks.
More Mutual Funds questions
- A fund has an average annual return of 14%, standard deviation of 20% and beta of 1.2. The risk-free rate is 6%. What is the fund's Sharpe r…
- A mutual fund scheme has total assets of ₹52,00,000 and external liabilities of ₹2,00,000. It has 2,50,000 units outstanding. What is the Ne…
- A mutual fund scheme has net assets of ₹48,00,000 after deducting liabilities, and 1,20,000 units are outstanding. The scheme charges an exi…
- Ananya invests ₹1,00,000 in a mutual fund scheme when NAV is ₹25.00 and the entry load is 2%. Entry load is charged on NAV, so the purchase …
- A scheme holds securities worth Rs 90,00,000, cash of Rs 10,00,000 and accrued income of Rs 1,00,000. Liabilities are Rs 1,00,000 and the sc…
- A fund with NAV Rs 20 at the start had a year-end NAV of Rs 23 with a Rs 1 dividend. Its return was 20%. Over the same year the risk-free ra…