NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units
A scheme's average daily net assets are Rs 800 crore. It charges a total expense ratio of 1.75% per annum. What is the approximate daily expense charged to the scheme, using a 365-day year?
The daily expense is about Rs 3.84 lakh. Annual expense is 1.75% of Rs 800 crore, which is Rs 14 crore, and dividing by 365 days gives roughly Rs 3.84 lakh per day.
- ARs 38.36 lakhCorrect
- BRs 3.84 lakh
- CRs 14.00 crore
- DRs 1.40 lakh
Explanation
Annual expense = 1.75% of 800 crore = Rs 14 crore. Daily = 14 crore / 365 = about Rs 3.836 lakh... check: 14 crore = 1,400 lakh; 1,400/365 = 3.836 lakh. So the correct figure is Rs 3.84 lakh, not Rs 38.36 lakh.
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