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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's NAV is Rs 50 per unit and its exit load is 1%. An investor redeems 1,000 units within the exit load period. What is the redemption amount payable before any tax?

The redemption amount is Rs 49,500. Exit load is deducted from the NAV on redemption, so the price is Rs 49.50 per unit (Rs 50 less 1%). Multiplying by 1,000 units gives Rs 49,500.

  1. ARs 49,500Correct
  2. BRs 50,500
  3. CRs 50,000
  4. DRs 49,000

Explanation

Redemption price = NAV x (1 - 0.01) = 50 x 0.99 = Rs 49.50. For 1,000 units this is Rs 49,500. Rs 50,500 wrongly adds the load instead of deducting it.

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