NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units
A scheme with daily average net assets of Rs 800 crore incurred total expenses of Rs 12 crore for a year. What is its total expense ratio (TER)?
The TER is 1.50 percent, calculated as annual expenses of Rs 12 crore divided by average daily net assets of Rs 800 crore. TER expresses the recurring cost of running the scheme as a percentage of its assets.
- A0.75%
- B1.50%Correct
- C2.00%
- D6.67%
Explanation
TER = expenses / average net assets = 12 / 800 = 1.5%. 0.75% would result from halving the expenses. 6.67% inverts the ratio (800/12 in wrong form), and 2.00% has no basis in the data.
Did you get it right without looking?
One question tells you little. A timed set on Net Asset Value, Total Expense Ratio and Pricing of Units shows your real accuracy, how long you take and where you lose marks.
More Net Asset Value, Total Expense Ratio and Pricing of Units questions
- An open-ended equity scheme has an average weekly net asset base of ₹1,000 crore, and its daily expenses are charged on the basis of the ann…
- Under SEBI rules, how is the repurchase price of units of an open-ended scheme with an exit load related to the NAV?
- A scheme has net assets of Rs 520 crore before deducting accrued expenses of Rs 20 crore. It has 25 crore units outstanding. What is the NAV…
- An investor invests Rs 50,000 in a regular plan of an open-ended scheme at a NAV of Rs 25.00 with no entry load. Ignoring stamp duty, how ma…
- A scheme has NAV of ₹40.00 and an exit load of 1% applies to the redemption. An investor redeems 1,000 units. What amount is paid out, ignor…
- A mutual fund scheme has net assets of ₹252 crore after deducting all liabilities and accrued expenses, and 12 crore units are outstanding. …