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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Mutual Funds

A mutual fund scheme has a NAV of Rs 50.00 per unit. It charges an exit load of 1% if units are redeemed within one year. An investor redeems 1,000 units after 8 months. What amount will the investor receive, ignoring taxes and other charges?

The investor receives Rs 49,500. Redemption happens within one year, so the 1% exit load is deducted from the NAV of Rs 50, giving Rs 49.50 per unit, and 1,000 units therefore return Rs 49,500 before taxes.

  1. ARs 50,000
  2. BRs 49,500Correct
  3. CRs 50,500
  4. DRs 49,000

Explanation

Exit load is charged on the NAV, so the redemption price is 50 x (1 - 0.01) = Rs 49.50. Multiplying by 1,000 units gives Rs 49,500. Rs 50,000 ignores the load because the redemption is within one year, and Rs 50,500 wrongly adds the load.

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