CMA Final · Strategic Financial Management · Mutual Funds
A mutual fund scheme has total assets of ₹52,00,000 (market value of investments plus cash) and external liabilities of ₹2,00,000. It has 2,00,000 units outstanding. What is the NAV per unit?
NAV per unit is ₹25. Net assets equal total assets of ₹52,00,000 less liabilities of ₹2,00,000, giving ₹50,00,000, which divided by 2,00,000 units gives ₹25. Ignoring liabilities would wrongly give ₹26.
- A₹25.00Correct
- B₹26.00
- C₹24.00
- D₹27.00
Explanation
NAV = (Assets − Liabilities) / Units = (52,00,000 − 2,00,000) / 2,00,000 = 50,00,000 / 2,00,000 = ₹25. Dividing gross assets (₹26) ignores liabilities, which is the key error.
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