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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units

A scheme with an exit load of 1% if units are redeemed within 12 months has a NAV of Rs 40 on the redemption date. An investor redeems 500 units after 8 months. What amount does the investor receive, ignoring taxes?

The investor receives Rs 19,800. Redemption is within 12 months, so the 1% exit load applies. Gross value is 500 units times Rs 40, which is Rs 20,000, and the exit load of Rs 200 is deducted from this amount, leaving Rs 19,800.

  1. ARs 19,500
  2. BRs 19,800Correct
  3. CRs 20,000
  4. DRs 20,200

Explanation

Redemption value = 500 x 40 = Rs 20,000. Exit load = 1% x 20,000 = Rs 200. Net proceeds = Rs 19,800. Rs 20,000 ignores the load since redemption is within 12 months, and Rs 20,200 wrongly adds the load.

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