Ch.2 · Advantages and Limitations of Mutual Funds · medium

A scheme has total assets of ₹500 crore, total liabilities of ₹5 crore, and 50 crore units outstanding. What is the NAV?

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EXPLANATION

NAV = (Total Assets − Liabilities) ÷ Units Outstanding = (₹500 crore − ₹5 crore) ÷ 50 crore = ₹495 crore ÷ 50 crore = ₹9.90 per unit. This formula is tested frequently in the NISM exam in both conceptual and numerical form.

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