NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units
An investor invests Rs 50,000 in a regular plan of an equity scheme when the applicable NAV is Rs 25.00 and the entry load is nil, as per SEBI rules. How many units are allotted?
The investor receives 2,000 units. Entry load is not permitted for mutual funds in India, so the whole Rs 50,000 is invested at the applicable NAV of Rs 25, giving 50,000 divided by 25 equals 2,000 units.
- A2,000 unitsCorrect
- B2,050 units
- C1,950 units
- D1,800 units
Explanation
Since SEBI abolished entry load in 2009, units are allotted at the applicable NAV. Units = 50,000 / 25 = 2,000. The other options assume a load or arithmetic errors.
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