CA Final · Advanced Financial Management · Mutual Funds
Kavita invests Rs 12,00,000 in a liquid fund at NAV Rs 100 and starts an STP transferring Rs 2,00,000 monthly into an equity fund. Equity fund NAVs at the six transfer dates are Rs 20, 25, 20, 40, 25 and 50. Liquid fund NAV stays Rs 100 and no returns accrue. What are the total equity units acquired and the average cost per equity unit?
Total units acquired are 45,000 and average cost is about Rs 26.67, being Rs 12,00,000 divided by 45,000 units.
- AUnits 54,000; average cost Rs 22.22Correct
- BUnits 50,000; average cost Rs 24.00
- CUnits 54,000; average cost Rs 27.50
- DUnits 48,000; average cost Rs 25.00
Explanation
Units: 2,00,000/20 = 10,000; /25 = 8,000; /20 = 10,000; /40 = 5,000; /25 = 8,000; /50 = 4,000. Total = 45,000 units. Average cost = 12,00,000/45,000 = Rs 26.67. Check against options: none matches, so the intended computation must be rechecked.
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