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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 puts Rs 50,000 in a scheme when the NAV is Rs 25.00. Assuming no entry load or stamp duty considerations, how many units are allotted, and what is the value if NAV rises to Rs 28?

The investor gets 2,000 units, worth Rs 56,000 after the NAV rises to Rs 28. Units are the amount invested divided by the NAV, which is 50,000 divided by 25. The current value is the units multiplied by the new NAV of Rs 28.

  1. A2,000 units; Rs 56,000Correct
  2. B1,800 units; Rs 50,400
  3. C2,000 units; Rs 54,000
  4. D2,500 units; Rs 70,000

Explanation

Units = 50,000 / 25 = 2,000. Value at NAV 28 = 2,000 x 28 = Rs 56,000. Rs 54,000 uses an NAV of 27, and the others use incorrect unit counts.

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