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 NAV of Rs 50 and charges an exit load of 2%. At what price will the scheme redeem units?
The redemption price is Rs 49.00. Exit load is deducted from the NAV when units are redeemed, so 2% of Rs 50, which is Re 1, is subtracted, giving Rs 49 per unit.
- ARs 51.00
- BRs 49.00Correct
- CRs 50.00
- DRs 48.00
Explanation
Redemption price = NAV x (1 - exit load) = 50 x 0.98 = Rs 49.00. Rs 51 adds the load, which applies to entry-type pricing and is not permitted as entry load now. Rs 50 ignores the load.
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