NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Concept and Role of a Mutual Fund
An investor buys 2,000 units at NAV Rs 30 and the scheme later pays a dividend (IDCW) of Rs 2 per unit, after which the NAV is Rs 34. Ignoring taxes and costs, what is the investor's total absolute return on the investment?
The total absolute return is 20%. The investor put in Rs 60,000 and now holds units worth Rs 68,000 plus Rs 4,000 of dividend, a total of Rs 72,000, so the gain of Rs 12,000 is 20% of the amount invested.
- A20%Correct
- B13.33%
- C6.67%
- D10%
Explanation
Investment = 2,000 x 30 = Rs 60,000. Current value = 2,000 x 34 = Rs 68,000, plus IDCW 2,000 x 2 = Rs 4,000, total Rs 72,000. Gain = Rs 12,000, which is 20% of 60,000. 13.33% ignores the dividend.
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