NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager
Ms. Kavita invests Rs 60 lakh under a discretionary PMS. The portfolio manager charges a fixed fee of 2% p.a. on the opening value. Opening value is Rs 60,00,000 and closing value after one year, before fees, is Rs 69,00,000. What is her net return after the fee, assuming no other costs?
The net return is 13%. The gross gain of Rs 9,00,000 equals 15% of Rs 60 lakh, and the fee of 2% on the opening value is Rs 1,20,000, leaving Rs 7,80,000, which is 13% of the invested amount.
- A15.0%
- B13.0%Correct
- C12.0%
- D14.0%
Explanation
Gross gain = 69,00,000 - 60,00,000 = Rs 9,00,000, i.e. 15%. Fee = 2% of 60,00,000 = Rs 1,20,000. Net gain = 7,80,000, which is 7,80,000/60,00,000 = 13%. Option 15% ignores the fee.
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