NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance
A mutual fund scheme's NAV rose from Rs 40 to Rs 46 over one year, and it paid no dividend during the year. What is the absolute return for the year?
The absolute return is 15%. The NAV gain of Rs 6 is divided by the opening NAV of Rs 40, since returns are always measured on the starting value. Using the closing NAV as the base would wrongly give 13.04%.
- A13.04%
- B15%Correct
- C6%
- D12%
Explanation
Absolute return = (46 - 40) / 40 = 6/40 = 15%. The 13.04% figure comes from dividing the gain by the ending NAV (6/46), which is the wrong base. The 6% figure is just the rupee gain, not a percentage.
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