A Mutual fund has shown Net Asset Value (NAV) of ₹11.60 at the commencement of the year. At the end of the year NAV increases to ₹12.50. Meanwhile, the Fund distributes ₹0.75 as dividend and ₹0.85 as capital gains. Had t

CS Executive · Securities Laws and Capital Markets · PYQS · December 2019
A Mutual fund has shown Net Asset Value (NAV) of ₹11.60 at the commencement of the year. At the end of the year NAV increases to ₹12.50. Meanwhile, the Fund distributes ₹0.75 as dividend and ₹0.85 as capital gains. Had these distributions been re-invested at an average NAV of ₹12.20, what is the return for 400 units ?

Answer & Explanation:

When dividend and capital gains are reinvested into additional units of the Fund: Return per unit: dividend + capital gain = ₹0.75 + ₹0.85 = ₹1.60 Hence, total return received for 400 units = ₹1.60 x 400 = ₹640 Additional units that can be purchased = ₹640 / 12.20 = 52.46 units

Topics: Mutual Funds

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic