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

Which statement about the NAV of a mutual fund scheme is correct?

NAV reflects the market value of a scheme's assets less its liabilities, expressed per unit. It changes with portfolio valuations and accrued expenses, and open-ended schemes publish it every business day. It is not fixed at face value and is not increased by any entry load.

  1. AIt is declared once a week for open-ended equity schemes
  2. BIt reflects the market value of the scheme's assets less liabilities, per unitCorrect
  3. CIt is increased by the entry load charged on purchases
  4. DIt is fixed at the face value for the life of the scheme

Explanation

NAV is the per-unit value of a scheme's net assets, marked to market, so it moves with portfolio values and liabilities. Open-ended schemes declare NAV every business day. Entry load is not permitted, and NAV does not stay fixed at face value.

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