NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance
A scheme's NAV was Rs 20.00 at the start of a period. It paid a dividend of Rs 2.00 per unit during the period, and the NAV at the end was Rs 21.00. Ignoring reinvestment, what is the total return for the period?
The total return is 15%. The capital gain of Rs 1 and the dividend of Rs 2 together give Rs 3 per unit, which is divided by the opening NAV of Rs 20. Leaving out the dividend would understate the return at 5%.
- A5.00%
- B10.00%
- C15.00%Correct
- D20.00%
Explanation
Total return = (closing NAV - opening NAV + dividend) / opening NAV = (21 - 20 + 2) / 20 = 3/20 = 15%. Ignoring the dividend gives 5%. Using the dividend alone gives 10%.
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