NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance
A mutual fund scheme's NAV rose from Rs 40.00 at the start of the year to Rs 46.00 at the end of the year, with no dividends paid. What is the absolute return for the year?
The absolute return is 15%. The gain of Rs 6 per unit is divided by the opening NAV of Rs 40, because returns are always measured on the starting value of the investment, not on the ending NAV.
- A13.04%
- B15.00%Correct
- C6.00%
- D18.00%
Explanation
Absolute return = (46 - 40) / 40 = 6/40 = 15%. The 13.04% figure wrongly divides the gain by the ending NAV (6/46). The 6.00% figure is the rupee gain, not a percentage. The 18.00% figure has no basis in the data.
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