NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance
A scheme's NAV grew from Rs 25.00 to Rs 36.00 over exactly 2 years, with no dividends. What is the compounded annual growth rate (CAGR)?
The CAGR is 20%. The NAV multiplied 1.44 times in two years, and the square root of 1.44 is 1.20, meaning 20% a year. Dividing the 44% total return by two gives 22%, which ignores compounding.
- A22.0%
- B44.0%
- C20.0%Correct
- D18.0%
Explanation
Growth multiple = 36/25 = 1.44. The square root of 1.44 is 1.20, so CAGR = 20%. A simple average of 44% over 2 years gives 22%, which ignores compounding. The 44% figure is the total two-year return.
Did you get it right without looking?
One question tells you little. A timed set on Mutual Fund Scheme Performance shows your real accuracy, how long you take and where you lose marks.
More Mutual Fund Scheme Performance questions
- An investor put Rs 1,00,000 in a scheme and the investment grew to Rs 1,44,000 after exactly 2 years, with no interim payouts. What is the c…
- 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 t…
- An investor put Rs 1,00,000 in a scheme and the value after exactly 2 years was Rs 1,44,000, with no interim payouts. What is the compounded…
- Fund A has a return of 14%, standard deviation 10% and beta 1.0. The risk-free rate is 6%. Fund B has a return of 16%, standard deviation 20…
- A scheme's NAV was Rs 50.00 at the start of the year and Rs 60.50 two years later, with no dividends. What is its compounded annual growth r…
- In the context of mutual fund scheme performance, what is 'tracking error' for an index fund?