NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Mutual Funds
Ms. Kavita Rao invests Rs 1,00,000 in a mutual fund scheme when the NAV is Rs 25. After one year, the NAV is Rs 28 and the scheme has paid an IDCW of Rs 2 per unit during the year. Ignoring taxes and loads, what is her total return for the year?
Her total return is 20%. The NAV rose from Rs 25 to Rs 28, a gain of Rs 3, and she also received Rs 2 of IDCW per unit. The combined Rs 5 gain divided by the Rs 25 starting NAV gives 20%.
- A12%
- B20%Correct
- C8%
- D10%
Explanation
Units = 1,00,000 / 25 = 4,000. Capital gain per unit = 3, IDCW per unit = 2, so total gain per unit = 5. Total return = 5 / 25 = 20%. 12% counts only capital appreciation, and 8% counts only the IDCW.
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