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 exit load of 1% if redeemed within 1 year. An investor redeems 1,000 units at NAV Rs 40.00 within 6 months. What is the redemption proceeds amount, ignoring taxes?
The redemption proceeds are Rs 39,600. The exit load of 1% is deducted from the NAV of Rs 40, giving a repurchase price of Rs 39.60, which is multiplied by 1,000 units.
- ARs 39,600Correct
- BRs 40,000
- CRs 40,400
- DRs 39,000
Explanation
Exit price = 40 x (1 - 0.01) = Rs 39.60. Proceeds = 1,000 x 39.60 = Rs 39,600. Rs 40,000 ignores the load; Rs 40,400 adds it instead of deducting.
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