CMA Final · Strategic Financial Management · Mutual Funds
A mutual fund scheme has total assets of Rs 52,00,000 and external liabilities of Rs 2,00,000. It has 2,50,000 units outstanding. The fund charges an exit load of 1% on redemption. What is the redemption price per unit?
The redemption price is Rs 19.80 per unit. NAV is net assets of Rs 50,00,000 divided by 2,50,000 units, which is Rs 20, and the 1% exit load is deducted from NAV on redemption, giving Rs 19.80.
- ARs 19.80Correct
- BRs 20.00
- CRs 20.80
- DRs 20.60
Explanation
NAV = (52,00,000 - 2,00,000) / 2,50,000 = Rs 20. Exit load of 1% reduces the redemption price: 20 x 0.99 = Rs 19.80. Rs 20.00 ignores the load; Rs 20.80 uses assets without deducting liabilities and no load.
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