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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance

A mutual fund scheme's NAV rose from Rs 40.00 to Rs 46.00 over exactly one year, and no dividend was 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, which is the correct base for measuring return. Using the closing NAV as the base would understate the return.

  1. A13.04%
  2. B15.00%Correct
  3. C6.00%
  4. D86.00%

Explanation

Absolute return = (46 - 40) / 40 = 6/40 = 15%. The 13.04% option wrongly uses the closing NAV as the base (6/46). The 6.00% option is just the rupee gain and not a percentage. The 86.00% option wrongly adds the two NAVs.

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