Skip to content

NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units

An open-ended scheme has an average weekly net asset of Rs 800 crore for a year and incurred total expenses of Rs 14 crore. What is its Total Expense Ratio?

The Total Expense Ratio is 1.75%. It is computed by dividing annual scheme expenses of Rs 14 crore by average weekly net assets of Rs 800 crore and multiplying by 100, expressing expenses as a percentage of assets managed.

  1. A1.75%Correct
  2. B1.40%
  3. C2.25%
  4. D5.71%

Explanation

TER = total expenses / average net assets x 100 = 14 / 800 x 100 = 1.75%. Using 14 as a percent of 250 or other bases gives wrong values; 5.71% inverts the ratio base incorrectly.

Did you get it right without looking?

One question tells you little. A timed set on Net Asset Value, Total Expense Ratio and Pricing of Units shows your real accuracy, how long you take and where you lose marks.

Practise Net Asset Value, Total Expense Ratio and Pricing of UnitsFree diagnostic mock

More Net Asset Value, Total Expense Ratio and Pricing of Units questions