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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

An investor puts Rs 2,00,000 in a mutual fund scheme at NAV Rs 40 and receives 5,000 units. One year later the NAV is Rs 46 and a dividend of Rs 2 per unit was paid during the year. What is the total return for the year?

The total return is 20%. Per unit, the NAV rose from Rs 40 to Rs 46, a gain of Rs 6, and a dividend of Rs 2 was received, giving Rs 8 on Rs 40. Ignoring the dividend would wrongly give 15%.

  1. A20%Correct
  2. B15%
  3. C5%
  4. D23%

Explanation

Capital gain per unit = 46 - 40 = Rs 6; dividend = Rs 2; total Rs 8 per unit. Return = 8/40 = 20%. Check: 5,000 x 8 = Rs 40,000 on Rs 2,00,000 = 20%. Ignoring the dividend gives 15%.

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