CMA Final · Strategic Financial Management · Mutual Funds
A mutual fund scheme has net assets of Rs 52,00,000 after deducting all liabilities and has 4,00,000 units outstanding. The fund charges an exit load of 1% on redemption. What is the price at which an investor can redeem a unit?
The redemption price is Rs 12.87. NAV is Rs 52,00,000 divided by 4,00,000 units, which is Rs 13. The exit load of 1% is deducted from NAV on redemption, so the investor receives 13 x 0.99 = Rs 12.87 per unit.
- ARs 12.87Correct
- BRs 13.00
- CRs 13.13
- DRs 12.74
Explanation
NAV = 52,00,000 / 4,00,000 = Rs 13.00. Redemption price = NAV x (1 - 0.01) = 13.00 x 0.99 = Rs 12.87. Rs 13.13 wrongly adds the load, and Rs 13.00 ignores the load.
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