IFIC Mutual Funds Licensing Practice Exam · Question
What is the 'Net Asset Value (NAV) per unit' of a mutual fund?
NAV per unit is calculated by taking the total value of the fund's assets, subtracting its liabilities, and then dividing the result by the number of units outs
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Question: What is the 'Net Asset Value (NAV) per unit' of a mutual fund?
Answer options:
- The total value of all assets held by the fund.
- The market price at which fund units trade on an exchange. ✅ The total value of the fund's assets minus its liabilities, divided by the number of outstanding units.
- The annual income generated by the fund.
Correct answer: The total value of the fund's assets minus its liabilities, divided by the number of outstanding units.
Explanation: NAV per unit is calculated by taking the total value of the fund's assets, subtracting its liabilities, and then dividing the result by the number of units outstanding. This is the price at which investors buy and sell units of an open-end mutual fund.
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