Question

Calculate the NAV of a Mutual Fund with a scheme size of 100 Cr. and a face value per unit of Rs. 10 and investment shares having a market value of Rs. 400 Cr.​

Answer 1

ANSWER :

• ❖ The NAV of a Mutual Fund with a scheme size of Rs. 100 Cr. and a face value per unit of Rs. 10 and investment shares having a market value of Rs. 400 Cr. will be Rs. 40 Cr.

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SOLUTION :

❒ Given :-

• Size of the scheme = Rs. 100 Cr.

• Face value per unit = Rs. 10

• Market Value of Investment shares = Rs. 400 Cr.

❒ To Calculate :-

• NAV of the mutual fund = ?

❒ Required Formula :-

• $\dag \: \: \underline{ \boxed{ \bold{ \: NAV = \dfrac{Net \: \: Assets }{No. \: \: of \: \: Outstanding \: \: Units \: }}}}$

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❒ Calculation :-

Here,

• Market Value of Investment shares = Rs. 400 Cr.

As there is no other asset and liability mentioned in the question, the Market Value of Investment shares will be the Value of the Total Assets as well as the Net Assets.

And,

• Size of the scheme = Rs. 100 Cr.

• Face value per unit = Rs. 10

So,

• No. of outstanding units = $\rm{ \dfrac{Size \: \: of \: \: the \: \: scheme }{Face \: \: value \: \: per \: \: unit}}$

➨ No. of outstanding units = $\rm{ \dfrac{Rs. \: 100 \: Cr.}{Rs. \: 10}}$

➨ No. of outstanding units = $\rm{Rs. \: 10 \: Cr.}$

Now,

• Net Assets = Rs. 400 Cr.

• No. of Outstanding Units = Rs. 10 Cr.

Using the formula of calculating NAV, we get,

• $\bigstar \: \: \sf{ \: NAV = \dfrac{Net \: \: Assets }{No. \: \: of \: \: Outstanding \: \: Units \: }}$

$\sf{ \implies \: NAV = \dfrac{ Rs. \: 400 \: Cr. }{ Rs. \: 10 \: Cr. }}$

$\sf{ \implies \: NAV = \underline{Rs. \: 40 \: Cr. }}$