CA Final · Advanced Financial Management · Mutual Funds
Under a scheme, repurchase price is Rs 19.60 per unit after a 2% exit load on NAV. What is the NAV, and what would be the sale price if a 1% entry load on NAV applied instead?
NAV is Rs 20.00 and the sale price would be Rs 20.20. Since the repurchase price equals NAV less 2%, NAV is Rs 19.60 divided by 0.98, which is Rs 20. Adding a 1% entry load to this NAV gives Rs 20.20.
- ANAV Rs 20.00; sale price Rs 20.20Correct
- BNAV Rs 19.99; sale price Rs 20.19
- CNAV Rs 20.00; sale price Rs 19.80
- DNAV Rs 21.00; sale price Rs 21.21
Explanation
Repurchase = NAV x 0.98, so NAV = 19.60 / 0.98 = Rs 20.00. Check: 20 x 0.98 = 19.60. Sale price = 20 x 1.01 = Rs 20.20. Rs 19.99 comes from adding 2% to 19.60 instead of dividing.
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 compares four equity schemes using the risk-free rate of 6%. Scheme A has a return of 15% and standard deviation of 10%. Scheme …
- A mutual fund scheme earned an average annual return of 16% with a standard deviation of 20%. The risk-free rate is 6% and the scheme's beta…
- A fund's repurchase price is ₹49.50 per unit after an exit load of 1% of NAV and no entry load. What is the NAV per unit and the price at wh…
- A fund's NAV rose from ₹40.00 to ₹46.00 during the year. It paid a dividend of ₹2.00 per unit and distributed no capital gains. What is the …
- Meera invests ₹10,000 on the first day of each month through a SIP in a mutual fund scheme. The NAVs on the four investment dates are ₹20, ₹…
- Two funds are compared with a risk-free rate of 5% and market return of 12% (market standard deviation 14%). Fund P: return 15%, beta 1.1, s…