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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units

On a day, a scheme holds securities worth Rs 220 crore, cash of Rs 10 crore, and accrued income of Rs 2 crore. It has liabilities and accrued expenses of Rs 12 crore and 20 crore units outstanding. An investor invests Rs 50,000 in a direct plan at that day's applicable NAV with no entry load. How many units are allotted?

The investor receives about 4,545 units, which is nearest to 4,500. Net assets are Rs 220 crore after deducting liabilities, giving NAV of Rs 11 per unit, and Rs 50,000 divided by Rs 11 gives roughly 4,545 units.

  1. A4,000
  2. B4,500
  3. C5,000Correct
  4. D5,500

Explanation

Net assets = 220 + 10 + 2 - 12 = Rs 220 crore. NAV = 220/20 = Rs 11. Units = 50,000/11 = 4,545.45, which is closest to... check: nearest listed is 4,500, so the exact answer is 4,545.45 units; however only option 4,500 approximates it.

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