NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Mutual Funds
Rohan invests Rs 5,000 on the first of each month through a SIP for three months. The NAVs on the three dates are Rs 20, Rs 25 and Rs 20 respectively. What is his average cost per unit (to the nearest paisa)?
His average cost per unit is Rs 21.43. The SIP buys 250, 200 and 250 units, totalling 700 units for Rs 15,000 invested. Dividing total money by total units gives Rs 21.43, which is below the simple average NAV of Rs 21.67 because of rupee cost averaging.
- ARs 21.67
- BRs 21.43Correct
- CRs 22.50
- DRs 20.00
Explanation
Units: 5,000/20 = 250; 5,000/25 = 200; 5,000/20 = 250; total 700 units for Rs 15,000. Average cost = 15,000/700 = Rs 21.43. Rs 21.67 is the simple average of NAVs, which is wrong because more units are bought when NAV is lower.
Did you get it right without looking?
One question tells you little. A timed set on Mutual Funds shows your real accuracy, how long you take and where you lose marks.
More Mutual Funds questions
- An investor holds units of an equity-oriented mutual fund and sells them 18 months after purchase at a profit. For tax purposes in India, ho…
- A mutual fund scheme has an NAV of Rs 50.00 per unit and an exit load of 1% applicable if units are redeemed within one year. Ms. Kavita red…
- Mr Arjun Rao, a 30-year-old salaried investor, wants to invest Rs 10,000 every month for 20 years through a vehicle that lets him invest fix…
- A mutual fund scheme has a NAV of Rs 50.00 per unit. It charges an exit load of 1% if units are redeemed within one year. An investor redeem…
- Mr. Kapoor, aged 35, has a high risk appetite, a 15-year horizon and wishes to invest regularly each month in equity funds to smooth out pur…
- Mr. Arvind Menon, aged 58, wants regular monthly cash flow, has a low risk appetite and a three-year horizon. He asks whether a systematic w…