NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Risk, Return and Performance of Funds
An equity fund's NAV was Rs 40.00 at the start of a year and Rs 46.00 at the end, with no dividend paid during the year. What is the absolute return for the year?
The absolute return is 15%. The NAV rose by Rs 6 on an opening NAV of Rs 40, and return is the gain divided by the starting value, so 6 divided by 40 equals 15 percent.
- A13.04%
- B15.00%Correct
- C6.00%
- D18.50%
Explanation
Absolute return = (46 - 40) / 40 = 6/40 = 15%. The 13.04% figure wrongly uses the ending NAV as the base (6/46). The 6.00% figure is just the rupee gain, not a percentage.
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