NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units
An investor invests ₹1,00,000 in a regular plan of an open-ended scheme with an exit load of 1% if redeemed within 1 year. Units are bought at NAV ₹25.00 and, within 6 months, all are redeemed at NAV ₹30.00. Ignoring taxes and other charges, what amount does the investor receive?
The investor receives ₹1,18,800. The 4,000 units redeem at ₹30 for ₹1,20,000, and the 1% exit load of ₹1,200 is deducted from the redemption value because the units were redeemed within one year.
- A₹1,18,800Correct
- B₹1,20,000
- C₹1,19,000
- D₹1,21,200
Explanation
Units = 1,00,000 / 25 = 4,000. Gross redemption = 4,000 x 30 = ₹1,20,000. Exit load is 1% of this = ₹1,200, hence the payout is ₹1,18,800. ₹1,20,000 ignores the load, and ₹1,21,200 wrongly adds it.
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