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Ch.5 · NFO Process and Rules · easy

At what price are units allotted to investors during an NFO?

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EXPLANATION

During an NFO, units are allotted at the face value of ₹10 per unit (for most schemes). This is the standard NFO price. After the NFO, when the scheme starts trading, the NAV is calculated daily based on the actual portfolio value and may move above or below ₹10.

A.At the scheme's last published NAV

B.At a face value of ₹10 per unit for most schemes [✓ Correct]

C.At a premium determined by the AMC based on market conditions

D.At a discount to NAV to attract investors

EXPLANATION

During an NFO, units are allotted at the face value of ₹10 per unit (for most schemes). This is the standard NFO price. After the NFO, when the scheme starts trading, the NAV is calculated daily based on the actual portfolio value and may move above or below ₹10.

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