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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 scheme with an exit load of 1% if redeemed within 1 year. The NAV at purchase is Rs 25.00. The investor redeems after 8 months when NAV is Rs 30.00. What is the redemption amount received, ignoring tax?

The investor receives Rs 59,400. The 2,000 units bought at Rs 25 are worth Rs 60,000 at Rs 30, and the 1% exit load of Rs 600 applies because redemption occurred within a year, leaving Rs 59,400.

  1. ARs 59,400Correct
  2. BRs 60,000
  3. CRs 59,500
  4. DRs 49,500

Explanation

Units = 50,000/25 = 2,000. Gross value = 2,000 x 30 = Rs 60,000. The exit load of 1% is Rs 600, so the payout is Rs 59,400. Rs 60,000 ignores the load, and Rs 49,500 wrongly applies the load to the original amount and ignores the gain.

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