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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager

Mr. Rao invests Rs 10,00,000 in a PMS portfolio. After one year the value is Rs 11,50,000 before fees. Fixed fee of 2% on the initial corpus (Rs 20,000) is charged at year end, with no other costs. What is his net return for the year?

The net return is 13%. The portfolio gains Rs 1,50,000 gross, the fixed fee of Rs 20,000 is deducted leaving Rs 1,30,000, and dividing by the Rs 10,00,000 invested gives 13 percent.

  1. A15%
  2. B13%Correct
  3. C12%
  4. D17%

Explanation

Gross gain = 1,50,000. Less fee 20,000 = 1,30,000. Net return = 1,30,000/10,00,000 = 13%. Option 15% ignores the fee; 12% subtracts 3% wrongly; 17% adds the fee.

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