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

What does NAV stand for and what does it represent?

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EXPLANATION

NAV stands for Net Asset Value. It represents the per-unit market value of a mutual fund scheme, calculated as (Total Assets − Liabilities) ÷ Number of Units Outstanding. It is the price at which investors buy or sell units of an open-ended scheme.

A.Net Asset Value — the market value per unit of a mutual fund scheme [✓ Correct]

B.Nominal Asset Value — the face value of a mutual fund unit

C.Net Annual Value — the annual return generated by the scheme

D.Net Accrual Value — the interest earned by the scheme in a year

EXPLANATION

NAV stands for Net Asset Value. It represents the per-unit market value of a mutual fund scheme, calculated as (Total Assets − Liabilities) ÷ Number of Units Outstanding. It is the price at which investors buy or sell units of an open-ended scheme.

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