NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Performance
An investor bought units at a NAV of Rs 20 and the scheme paid a dividend of Rs 2 per unit during the year, after which the NAV was Rs 21 at year end. Ignoring reinvestment and taxes, what is the total return for the year?
The total return is 15%. The NAV gain of Rs 1 plus the Rs 2 dividend gives Rs 3 of total benefit on an opening NAV of Rs 20, which is 15%. Ignoring the dividend would understate the return at 5%.
- A5.00%
- B10.00%
- C15.00%Correct
- D20.00%
Explanation
Total return = (change in NAV + dividend) / opening NAV = (1 + 2) / 20 = 15%. The 5% figure ignores the dividend. The 10% figure counts only the dividend and ignores the NAV gain.
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