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An investor invested Rs. 10,000 in a mutual fund scheme when the NAV was Rs. 20. How many units were allotted, ignoring loads and taxes?
A{'text': '200 units', 'label': 'A'}
B{'text': '2,000 units', 'label': 'B'}
C{'text': '1,000 units', 'label': 'C'}
D{'text': '500 units', 'label': 'D'}
Answer & Solution
Correct answer: D. {'text': '500 units', 'label': 'D'}
1. Units allotted equal the amount invested divided by the applicable NAV per unit.
2. Given: amount = Rs. 10,000 and NAV = Rs. 20.
3. Units = 10,000 / 20 = 500 units.
4. Face value does not affect the calculation; NAV is the applicable price on the day.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 3 "Legal Structure of Mutual Funds in India", §3 unit concept_
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