NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
An investor puts Rs 5,00,000 in a unit of a collective investment vehicle whose NAV rises from Rs 40.00 to Rs 46.00 over one year, with no dividend paid. What is the percentage return for the year?
The return is 15 percent. The NAV gain of Rs 6 per unit is divided by the opening NAV of Rs 40, giving 15 percent. Using the closing NAV as the base would wrongly give 13.04 percent, because return is always measured on the starting value.
- A13.04%
- B12.00%
- C15.00%Correct
- D6.00%
Explanation
Return = (46 - 40) / 40 = 6/40 = 15%. The 13.04% figure comes from dividing by the ending NAV (6/46), which is the wrong base. The 6.00% figure is simply the rupee gain per unit and is not a percentage. The 12.00% figure is not derived from the data.
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