CA – FINAL

SFM - COMPILER
MUTUAL FUNDS

PROF. RAHUL MALKAN

WWW.RAHULMALKAN.COM

CONTACT NO - 8369095160
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Mutual Funds
Years May Nov
RTP Paper RTP Paper
2008 NA NA Yes No
2009 Yes Yes Yes Yes
2010 Yes Yes Yes No
2011 No Yes Yes Yes
2012 Yes Yes Yes Yes
2013 Yes Yes Yes Yes
2014 Yes Yes Yes Yes
2015 No Yes No Yes
2016 Yes Yes Yes Yes
2017 Yes No Yes Yes
2018 (Old) Yes Yes Yes Yes
2018 (New) Yes Yes Yes Yes
2008
Question 1 Nov 2008 – RTP
Arun has invested in three Mutual Fund Schemes as per details below:
MF X MF Y MF Z
Date of investment 01.12.2006 01.01.2007 01.03.2007
Amount of investment 50,000 1,00,000 50,000
Net Asset Value (NAV) at entry date 10.50 10 10
Dividend received upto 31.03.2007 950 1,500 Nil
NAV as at 31.03.2007 10.40 10.10 9.80
Required:
What is the effective yield on per annum basis in respect of each of the
three schemes to Mr. Arun upto 31.03.2007?
Solution
MF A MF B MF C
Date of Investments 1/12/06 1/1/07 1/3/07
Amount of Investment 50,000 1,00,000 50,000
NAV on entry Date 10.50 10 10
Units Received 50,000 1,00,000 50,000
10.50 = 4761.9 10 = 10,000 10 = 5,000
Dividend Received 950 1,500 Nil
Dividend Per Unit 950 1,500 Nil
4761.9 = 0.1995 10,000 = 0.15
NAV at 31/3/2007 10.4 10.10 9.80
Holding Period 4 months 3 months 1 month
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HPY 0.1995 – 0.1 0.15 + 0.1 –0.2

10.5 x 100 = 10 x 100 10 x 100
0.9475% = 2.5% = 2%
MMY 0.9475 x 3 = 2.8425% 2.5 x 4 = 10% 2 x 12 = - 24%
EAY (1 + 0.009475)3 –1 (1.025)4–1 (1.02)12 – 1
= 2.8695% = 10.38% = –26.82%

2009
Question 2 May 2009 - RTP
On 01.07.2005 Mr. A invested in 10,000 units of face value of Rs.10 per unit.
On 31.03.2006 dividend was paid @ 10% and annualized yield was 140%. On
31.03.2007, 20% dividend was given. On 31.03.2008, Mr. A redeemed his all
his 11,270.56 units when his annualized yield was 75.45% over the period of his
holding. What are the NAVs as on 31.03.2006,31.03.2007 and 31.03.2008?

Solution
9 months 1 yr 1 Yr

1/7/2005 31/3/2006 31/3/2007 31/3/2008

Yield P.A 140% ? 75.45%

Units 10000 ? ? 11,270.56

Dividend NA 10% 20% NIL

NAV 10 X Y Z
Before we start calculation for NAV, first we need to understand that
investor is following dividend reinvestment plan because units are seen to be
increasing from 10,000 to 11,270.56 at the end of the period.

Calculation for First 9 months

Let the NAV on 31.3.2006 be X
Return from 1/7/2005 to 31.3.2006 (9 months) = 140 / 12 x 9 = 105%
Dividend Dist. + Capital Gain Dist. + Capital Appreciation
HPY = Purchase Price x 100

1(10% of 10) + (X – 10)

105 = 10 x 100

Therefore X = 19.5
Dividend = 10,000 x 1 = 10,000
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Amount Reinvested = 10,000

Units Received = 10,000 / 19.5
= 512.82 units
Total Units = 10,000 + 512.82
= 10,512.82
Calculation for First 1 yr 9 months
1 yr 1 Yr

31/3/2006 31/3/2007 31/3/2008

Units 10,512.82 ? 11,270.56

Dividend 10% 20% NIL

NAV 19.5 Y Z
Note : Units standing on 31/3/2007 would be the same as on 31/3/2008
because dividend was received on 31/3/2007 which would have been
reinvested and units would have increased.
Dividend Received = 10,512.82 x 10 x 20% = 21,025.64
Units added = 11,270.56 – 10,512.82 = 757.74
Amount at which it was reinvested, which would the NAV
= 21,025.64 / 757.74 = 27.7478 NAV

Last 3 months
1 yrs

31/3/2007 31/3/2008

Yield P.A 75.45%

11,270.56 11,270.56

NIL

NAV 27.7478 Z
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Return = 75.45%
Z – 27.7478
75.45 = 27.7478 x 100
Z = 48.6835

Question 3 May 2009 Paper – 2 Marks

Mr. X earns 10% on his investments in equity shares. He is considering a
recently floated scheme of a Mutual Fund where the initial expenses are 6% and
annual recurring expensed are expected to be 2%. How much the Mutual Fund
scheme should earn to provide a return of 10% to Mr. X?
Solution
Indifference Point between direct return from the Fund
R1
R2 = 1 – Initial Expense + Re

R2 = Return from the Fund

R1 = Direct Return
Re = Recurring Expenses
In the above Question
R2 = Return from the Fund
R1 = 10%
Re = 2%
Initial Expenses = 6%
10
R2 = 1 – 0.06 + 2 = 12.64%

Question 4 Nov 2009 - RTP

Consider the following information about the return on Classic Mutual
Fund, the market return and the T-bill returns:
Year Classic Mutual Market Index T-bills
Fund
1994 17.1 10.8 5.4
1995 –14.6 –8.5 6.7
1996 1.7 3.5 6.5
1997 8.0 14.1 4.3
1998 11.5 18.7 4.1
1999 –5.8 –14.5 7.0
2000 –15.6 –26.0 7.9
2001 38.5 36.9 5.8
2002 33.2 23.6 5.0
2003 –7.0 –7.2 5.3
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2004 2.9 7.4 6.2

2005 27.4 18.2 10.0
2006 23.0 31.5 11.4
2007 –0.6 –4.9 14.1
2008 21.4 20.4 10.7
The following additional information is available regarding the
comparative performance of five mutual funds:
Return Standard Deviation Beta
(%) (%)
Alpha 1.95 20.03 0.983 0.819
Beta 11.57 18.33 0.971 0.881
Gama 8.41 22.92 1.169 0.816
Rho 9.05 24.04 1.226 0.816
Theta 7.86 15.46 0.666 0.582
From the above information, calculate all the inputs required for
determining the Sharpe’s Ratio, Treynor’s ratio and Jensen’s ratio.
Solution
Classic (Ri) Market T-bills (Rp) Ri – Rp Rm – Rp
Index (Rm)
17.1 10.8 5.4 11.70 5.4
–14.6 –8.5 6.7 –21.30 –15.20
1.7 3.5 6.5 –4.8 –3.00
8.0 14.1 4.3 3.7 9.8
11.5 18.7 4.1 7.4 14.6
–5.8 –14.5 7.0 –12.8 –21.5
–15.6 –26.0 7.9 –23.5 –33.9
38.5 36.9 5.8 32.7 31.1
33.2 23.6 5.0 28.2 18.6
–7.0 –7.2 5.3 –12.3 –12.5
2.9 7.4 6.2 –3.3 1.2
27.4 18.2 10.0 17.4 8.2
23.0 31.5 11.4 11.6 20.1
–0.6 –4.9 14.1 –14.7 –19.0
21.4 20.4 10.7 10.7 9.7
Average 9.406 Average 8.267 Average 7.36
Standard Standard Standard
Deviation Deviation Deviation
16.40 17.126 2.815
Sharpe’s measure index
S =(Rp – Rp)/σp
Where,
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Rp = Average Return on portfolio

Rf = Risk-free rate of return
σp = Standard deviation of portfolio
Classic Mutual Fund- Sp = Rp - Rf/σp = 9.407– 7.360/16.4 = 0.125
Market Index- Sp = Rm – Rf/σm = 8.267– 7.360/17.126 = 0.053
Classic Mutual Fund is better on the basis of the Sharpe’s measure.
Treynor’s measure
T =(Rp – Rf)/βp
βp = Beta value of portfolio.
Using regression technique to fine Beta
After making calculation by taking Market Index as (x) and Classic Mutual
Fund as (y)the values are
Market (x)2 Classic (y) (y)2 (xy)
Index (x)
10.8 116.64 17.1 292.41 184.68
–8.5 72.25 –14.6 213.16 124.1
3.5 12.25 1.7 2.89 5.95
14.1 198.81 8.0 64.00 112.8
18.7 349.69 11.5 132.25 215.05
–14.5 210.25 –5.8 33.64 84.1
–26.0 676.00 –15.6 243.36 405.6
36.9 1361.61 38.5 1482.25 1420.65
23.6 556.96 33.2 1102.24 783.52
–7.2 51.84 –7.0 49.00 50.4
7.4 54.76 2.9 8.41 21.46
18.2 331.24 27.4 750.76 498.68
31.5 992.25 23.0 529.00 724.5
–4.9 24.01 –0.6 0.36 2.94
20.4 416.16 21.4 457.96 436.56
Σx2 = 5424.72 y = 9.406
Σy = 141.1 x = 8.267
Σy2 = 5361.69 n =15
Σxy = 5070.99.
Substituting values in the above equation
5070.99 – 15 x 9.406 x 8.267 3904.59
b= 5424.72 – 15 x 8.2622 = 4399.57 = 0.88

a = 9.406 – 0.88 x 8.267 = 2.13

From above calculation Beta value of security = 0.88
Treynor’s measure of Classic Mutual Fund - T1 = 9.407– 7.360/0.88 = 2.32
Treynor’s measure of Market Index- Tm = 8.267– 7.360/1.00 = 0.907
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Jensen’s performance measure

Rjt - Rij = αj + βj ( Rmt - Rft)
Where,
Rjt = Average return on portfolio j for period t
Rft = Risk less rate of interest for period t
αj = Intercept that measures the forecasting ability of the portfolio manager
βj = A measure of systematic risk
Rmt = Average return of a market portfolio for period t.
Substituting values in the above equation = 9.406 – 7.360 = αj + 0.88 (8.267 – 7.360)
αi = 2.046– 0.798 = 1.248
Question 5 : Nov Paper – 8 Marks
A mutual fund made an issue of 10,00,000 units of Rs.10 each on January 01,
2008. No entry load was charged. It made the following investments:
Rs.
50,000 Equity shares of Rs.100 each @ Rs.160 80,00,000
7% Government Securities 8,00,000
9% Debentures (Unlisted) 5,00,000
10% Debentures (Listed) 5,00,000
98,00,000
During the year, dividends of Rs.12,00,000 were received on equity
shares. Interest on all types of debt securities was received as and when due. At
the end of the year equity shares and 10% debentures are quoted at 175% and
90% respectively. Other investments are at par.
Find out the Net Asset Value (NAV) per unit given that operating expenses
paid during the year amounted to Rs.5,00,000. Also find out the NAV, if the
Mutual fund had distributed a dividend of Rs.0.80 per unit during the year to
the unit holders.
Solution
Opening = 10,00,000 x 10 = Rs.1,00,00,000 crore

Investments 98,00,000 Cash Rs.2,00,000

Fund
50,000 Equity shares of Rs.100 each @ Rs.175 87,50,000
7% Government Securities 8,00,000
9% Debentures (Unlisted) 5,00,000
10% Debentures (Listed) (90%) 4,50,000
Total 1,05,00,000
Without Distribution of Dividend
Cash
Opening Balance 2,00,000
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Add Dividend Received 12,00,000

Add Interest Received
7% Government Security 56,000
9% Debentures 45,000
10% Debentures 50,000
Less Operating Expenses (5,00,000)
Total 10,51,000
1,05,00,000 + 10,51,000
Net Asset Value (NAV) = 10,00,000 = Rs.11.551

Net Asset Value (NAV) with Dividend

Dividend = 10,00,000 x 0.80 = 8,00,000
1,05,00,000 + 10,51,000 – 8,00,000
= 10,00,000 = Rs.10.751

2010
Question 6 : May 2010 RTP
Ms. Sunidhi is working with an MNC at Mumbai. She is well versant with
the portfolio management techniques and wants to test one of the techniques
on an equity fund she has constructed and compare the gains and losses from
the technique with those from a passive buy and hold strategy. The fund
consists of equities only and the ending NAVs of the fund he constructed for
the last 10 months are given below:
Month Ending NAV Month Ending NAV
(Rs./unit) (Rs./unit)
December 2008 40.00 May 2009 37.00
January 2009 25.00 June 2009 42.00
February 2009 36.00 July 2009 43.00
March 2009 32.00 August 2009 50.00
April 2009 38.00 September 2009 52.00
Assume Sunidhi had invested a notional amount of Rs.2 lakhs equally in
the equity fund and a conservative portfolio (of bonds) in the beginning of
December 2008 and the total portfolio was being rebalanced each time the
NAV of the fund increased or decreased by 15%.
You are required to determine the value of the portfolio for each level of
NAV following the Constant Ratio Plan.
Solution
Stock Value of Value of Value of Total Revaluation Total No.
Port- buy- Conservative aggressive value of Action of units in
Folio hold Portfolio Portfolio Constand Aggressive
NAV Strategy (Rs.) (Rs.) Ratio Plan portfolio
(Rs.) (Rs.)
40.00 2,00,000 1,00,000 1,00,000 2,00,000 - 2500
25.00 1,25,000 1,00,000 62,500 1,62,500 - 2500
1,25,000 81,250 81,250 1,62,500 Buy 750 units 3250
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36.00 1,80,000 81,250 1,17,000 1,98,250 - 3250

1,80,000 99,125 99,125 1,98,250 Sell 496.53 2753.47

32.00 1,60,000 99,125 88,111.04 1,87,236.04 - 2753.47

38.00 1,90,000 99,125 1,04,631.86 2,03,756.86 - 2753.47
1,90,000 1,01,878.43 1,01,878.43 2,03,756.86 Sell 72.46 2681.01

37.00 1,85,000 1,01,878.50 99,197.37 2,01,075.87 - 2681.01

42.00 2,10,000 1,01,878.50 1,12,602.42 2,14,480.92 - 2681.01
43.00 2,15,000 1,01,878.50 1,15,283.43 2,17,161.93 - 2681.01
50.00 2,50,000 1,01,878.50 1,34,050.50 2,35,929 - 2681.01
2,50,000 1,17,964.50 1,17,964.50 2,35,929 Sell 321.72 2359.29

52.00 2,60,000 1,17,964.50 1,22,683.08 2,40,647.58 - 2356.29

Hence, the ending value of the mechanical strategy is Rs.2,40,647.58 and

buy & hold strategy is Rs.2,60,000.

Question 7 : May 2010 Paper – 6 Marks

Based on the following information, determine the NAV of a regular
income scheme on per unit basis:
Rs.Crores
Listed shares at Cost (ex-dividend) 20
Cash in hand 1.23
Bonds and debentures at cost 4.3
Of these, bonds not listed and quoted 1
Other fixed interest securities at cost 4.5
Dividend accrued 0.8
Amount payable on shares 6.32
Expenditure accrued 0.75
Number of units (Rs.10 face value) 20 lacs
Current realizable value of fixed income securities of 106.5
face value of Rs.100
The listed shares were purchased when Index was 1,000
Present index is 2.300
Value of listed bonds and debentures at NAV date 8
There has been a diminution of 20% in unlisted bonds and debentures.
Other fixed interest securities are at cost.
Solution
Particulars Adjustment Value
Rs.crores
Equity Shares 46.00
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Cash in hand 1.23

Bonds and debentures not listed (1 – 0.20) 0.80
Bonds and debentures listed 8.00
Dividends accrued 0.80
Fixed income securities 4.50
Sub total assets (A) 61.33
Less: Liabilities
Amount payable on shares 6.32
Expenditure accrued 0.75
Sub total liabilities (B) 7.07
Net Assets Value (A) – (B) 54.26
No of units 20,00,000
Net Assets Value per unit (Rs.54.26 crore / 20,00,000) Rs.271.30
Question 8 : Nov 2010 RTP
Mr. X, an investor purchased 200 units of ABC Mutual Fund at rate of
Rs.8.50 p.u., one year ago. Over the year Mr. X received Rs.0.90 as dividend
and had received a capital gains distribution of Rs.0.75 per unit.
You are required to find out:
Mr. X’s holding period return assuming that this no load fund has a NAV
of Rs.9.10 as on today.
Mr. X’s holding period return, assuming all the dividends and capital gains
distributions are reinvested into additional units as at average price of ` 8.75
per unit.
Solution
(a) Return for the year (all changes on a per unit basis):
Change in Price (Rs.9.10 - Rs.8.50) Rs.0.60
Dividends received Rs.0.90
Capital gains distributions Rs.0.75
Total return Rs.2.25
Holding period return = 2.25/8.50 = 26.47%
(b) When all dividends and capital gains distributions are reinvested into
additional units of the fund (Rs.8.75/unit):
Dividends and capital gains per unit: Rs.0.90 + Rs. 0.75 = Rs.1.65
Total amount received from 200 units: Rs.1.65 X 200 = Rs.330.00

Additional units added: ` 330/` 8.75 = 37.7 units

Value of 237.7 units held at end of year: 237.7 units X Rs. 9.10 = Rs.2,163
Price paid for 200 units at beginning of year 200 units X Rs. 8.50 = Rs.1,700
11 SFM - COMPILER

Thus, the Holding Period Return =

(No of Units at the end x Ending Price) – (No of units at Beg x Initial Prices)
No of Unis at the Beg xc Initial Price
2,163 – 1,700
= 1,700 x 100 = 27.24%

Question 9 : Nov 2010 RTP

Following is the historical performance information is available of the
capital market and a Tomplan Mutual Fund.
Year Tomplan Tomplan Return on Return on
Mutual Fund Mutual Fund Market Govt.
Beta return % index% securities%
2001 0.90 –3.00 -8.50 6.50
2002 0.95 1.50 4.00 6.50
2003 0.95 18.00 14.00 6.00
2004 1.00 22.00 18.50 6.00
2005 1.00 10.00 5.70 5.75
2006 0.90 7.00 1.20 5.75
2007 0.80 18.00 16.00 6.00
2008 0.75 24.00 18.00 5.50
2009 0.75 15.00 10.00 5.50
2010 0.70 –2.00 8.00 6.00
(a) From above information you are required to calculate the following risk
adjusted return measures for the measures for the Tomplan:
(i) Reward-to-variability ratio
(ii) Reward-to-volatility ratio
(b) Comment on the mutual fund’s performance.
Solution
(1) Calculation of average of these four variables
Year Tomplan Tomplan Return on Return on
Mutual Mutual market Govt.
Fund Beta Fund return index % securities
% %
2001 0.90 –3.00 -8.50 6.50
2002 0.95 1.50 4.00 6.50
2003 0.95 18.00 14.00 6.00
2004 1.00 22.00 18.50 6.00
2005 1.00 10.00 5.70 5.75
2006 0.90 7.00 1.20 5.75
2007 0.80 18.00 16.00 6.00
2008 0.75 24.00 18.00 5.50
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2009 0.75 15.00 10.00 5.50

2010 0.70 –2.00 8.00 6.00
Total 8.7 110.5 86.9 59.5
Average 0.87 11.05 8.69 5.95
Thus, the averages are as follows:
Mutual fund beta = 0.87
Mutual fund return = 11.05 per cent
Return on market index = 8.69 per cent
Return on Govt. securities = 5.95 per cent
(2) Standard deviation of returns of Tomplan Mutual fund
Year Mutual fund returns (X) 𝑿𝟐
1 –3.00 9.00
2 1.50 2.25
3 18.00 324.00
4 22.00 484.00
5 10.00 100.00
6 7.00 49.00
7 18.00 324.00
8 24.00 576.00
9 15.00 225.00
10 -2.00 4.00
Total 110.50 2097.25

N∑x2 – (∑x)2
σp = = 9.36
N2

(3) Standard deviation of returns on the market index

Year Return on market index 𝑿𝟐
(X)
1 –8.50 72.25
2 4.00 16.00
3 14.00 196.00
4 18.50 342.25
5 5.70 32.49
6 1.20 1.44
7 16.00 256.00
8 18.00 324.00
9 10.00 100.00
10 8.00 64.00
Total 86.90 1404.43
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N∑X2 – (∑x)2
σm = = 8.06
N2
(a) (i) Reward to variability ratio or Sharpe ratio
For Tomplan Mutual Fund

rp – rf 11.05 – 5.95
SR = = = 0.545
p 9.36
For Market

rp – rf 8.69 – 5.95
SR = = = 0.34
p 8.06
(ii) Reward to volatility ratio or Treynor ratio
For Tomplan Mutual Fund

rp – rf 11.05 – 5.95
TR = = = 5.86
p 0.87
For Market

rp – rf 8.69 – 5.95
TR = = = 2.74
p 1

(b) Mutual fund performance

Ratios of the mutual fund and the market is as follows:
Ratio Mutual fund Market index
Sharpe ratio 0.545 0.34
Treynor ratio 5.86 2.74
Thus from above it is clear that the Tomplan Mutual fund has performed
better than the market.

2011
Question 10 - May 2011 Paper - 8 Marks
An investor purchased 300 units of a Mutual Fund at Rs.12.25 per unit on
31 st December, 2009. As on 31 st December, 2010 he has received Rs.1.25 as
dividend and Rs.1.00 as capital gains distribution per unit.
Required :
a. The return on the investment if the NAV as on 31 st December, 2010 is
Rs.13.00.
b. The return on the investment as on 31st December, 2010 if all dividends
and capital gains distributions are reinvested into additional units of the
fund at Rs.12.50 per unit.
14 SFM - COMPILER

Solution
i) Payout Plan
Dividend Dist. + Capital Gain Dist. + Capital Appreciation
HPY = Purchase Price x 100

1.25 + 1 + 0.75
HPY = 12.25 = 24.49 % P.A

ii) Reinvestment Plan

Amount Reinvested = (1.25 + 1) x 300 units = 675
Units at the beginning = 300 units
675
No of units Received = 12.50 = 54 units

Total Units = 300 + 54 units = 354 units

354 x 13 - 300 x 12.25
Return = 300 x 12.25 = 25.22% P.A

Decision : Dividend Reinvestment Plan is better than dividend payout Plan

Question 11 Nov RTP – Nov 2011 RTP
1. April 2009 Fair Return Mutual Fund has the following assets and prices at
4.00st p.m.
Shares No. of Shares Market Price Per Share
(`)
A Ltd. 10000 19.70
B Ltd. 50000 482.60
C Ltd. 10000 264.40
D Ltd. 100000 674.90
E Ltd. 30000 25.90
No. of units of fund 8,00,000

Please calculate :
1. NAV of the Fund.
2. Assuming Mr. X, a HNI, send a cheque of ` 50,00,000 to the Fund and
Fund Manager purchases 18000 shares of C Ltd. and balance is held in
bank. Then what will be position of fund.
3. Now suppose on 2 April 2009 at 4.00 p.m. the market price of shares is as
follows :
Shares Rs.
A Ltd. 20.30
B Ltd. 513.70
C Ltd. 290.80
D Ltd. 671.90
ELtd. 44.20
15 SFM - COMPILER

Then what will be new NAV.

Solution
1) NAV on 1st April 2009
Stocks Value
A 10,000 x 19.70 1,97,000
B 50,000 x 482.60 2,41,30,000
C 10,000 x 264.40 26,44,000
D 1,00,000 x 674.90 6,74,90,000
E 30,000 x 25.90 7,77,000
Total 9,52,38,000
9,52,38,000
NAV = 8,00,000 = Rs.119.0475 per unit

2) Revised Fund Position

Cheque of Rs.50,00,000 from Mr. A which was invested in 18000 shares
in C Ltd.
Value of shares in C Ltd. = 18000 x 264.40 = 47,59,200
Cash (50,00,000 – 47,59,200) = Rs.2,40,800
Total Fund Value = Rs.9,52,38,000 + Rs.50,00,000 = Rs.10,02,38,000
50,00,000
Units Issued = 119.0475 = 42,000 units

Total Units = 8,00,000 + 42,000 = 8,42,000

10,02,38,000
NAV = 8,42,000 = Rs.119.0475 per unit
3) NAV on 2nd April 2009
Stocks Value
A 10,000 x 20.30 2,03,000
B 50,000 x 513.70 2,56,85,000
C 28,000 x 290.80 81,42,400
D 1,00,000 x 671.90 6,71,90,000
E 30,000 x 44.20 13,26,000
Cash 2,40,800
Total 10,27,87,200
10,27,87,200
NAV = 8,42,000 = Rs.122.08 per unit
16 SFM - COMPILER

Question 12 Nov 2011 Paper – 5 Marks

Orange purchased 200 units of Oxygen Mutual Fund at Rs.45 per unit on
31st December, 2009. In 2010, he received Rs.1.00 as dividend per unit and a
capital gains distribution of Rs.2 per unit. Required:
i. Calculate the return for the period of one year assuming that the NAV as
on 31st December 2010 was Rs. 48 per unit.
ii. Calculate the return for the period of one year assuming that the NAV as
on 31st December 2010 was Rs.48 per unit and all dividends and capital
gains distributions have been reinvested at an average price of ` 46.00 per
unit.
Ignore taxation.
Solution
(i) Returns for the year
(All changes on a Per -Unit Basis)
Change in Price: 48 – 45 Rs.3.00
Dividends received: Rs.1.00
Capital gains distribution Rs.2.00
Total reward Rs.6.00
6
Holding period reward: x 100 13.33%
45

(ii) When all dividends and capital gains distributions are re-invested into
additional units of the fund @ (Rs.46/unit)
Dividend + Capital Gains per unit =Rs.1.00+Rs.2.00 = Rs.3.00
Total received from 200 units = Rs.3.00 x 200 = Rs.600
600
Additional Units Acquired = =13.04 Units.
46

Total No.of Units = 200 units + 13.04 units = 213.04 units.

Value of 213.04 units held at the end of the year
= 213.04 units x Rs.48 = Rs.10225.92
Price Paid for 200 Units at the beginning of the year
= 200 units x Rs.45 = Rs.9000.00
Thus, the Holding Period Return would be:
(No of Units at the end x Ending Price) – (No of units at Beg x Initial Price)
= (No of Units at the Beg x Initital Price)
1,225.92 – 9,000
= 9,000 x 100 = 13.62%
17 SFM - COMPILER

2012
Question 13 May 2012 RTP – Similar to - Question 9 : Nov 2010 RTP
Question 14 May 2012 Paper
A Mutual Fund Co. has the following assets under it on the close of
business as on:
Company No. of 1st February 2012 2nd February, 2012
Shares Market price per Market price per
share (Rs) share (Rs)
L Ltd. 20,000 20.00 20.50
M Ltd. 30,000 312.40 360.00
N Ltd. 20,000 361.20 383.10
P Ltd. 60,000 505.10 503.90

Total No. of Units 6,00,000

i. Calculate Net Assets Value (NAV) of the Fund.
ii. Following information is given :
Assuming one Mr. A, submits a cheque of Rs.30,00,000 to the Mutual
Fund and the Fund manager of this company purchases 8,000 shares of
M Ltd; and the balance amount is held in Bank. In such a case, what would
be the position of the Fund?
iii. Find new NAV of the Fund as on 2nd February 2012.
Solution
1) NAV on 1st Feb 2012
Stocks Value
L 20,000 x 20 4,00,000
M 30,000 x 312.40 93,72,000
N 20,000 x 361.20 72,24,000
P 60,000 x 505.10 3,03,06,000
Total 4,73,02,000
4,73,02,000
NAV = 6,00,000 = Rs.78.8367 per unit

2) Revised Fund Position

Cheque of Rs.30,00,000 from Mr. A which was invested in 8000 shares in
M Ltd.
Value of shares in M Ltd. = 8000 x 312.40 = 24,99,200
Cash (30,00,000 – 24,99,200) = Rs.5,00,800
Total Fund Value = 4,73,02,000 + 30,00,000 = 5,03,02,000
18 SFM - COMPILER

30,00,000
Units Issued = 78.8367 = 38,053.34 units

Total Units = 6,00,000 + 38,053.34 = 6,38,053.34

5,03,02,000
NAV = 6,38,053.34 = Rs.78.8367 per unit

3) NAV on 2nd Feb 2012

Stocks Value
L 20,000 x 20.50 4,10,000
M 38,000 x 360 1,36,80,000
N 20,000 x 383.10 76,62,000
P 60,000 x 503.90 3,02,34,000
Cash 5,00,800
Total 5,24,86,800
5,24,86,800
NAV = 6,38,053.34 = Rs.82.26 per unit

Question 15 Nov 2012 RTP – Similar to Question 1 – Nov 2008 – RTP

Question 16 Nov 2012 Paper – 5 Marks
The following information is extracted from Steady Mutual Fund’s Scheme:
- Asset Value at the beginning of the month - Rs.65.78
- Annualised return - 15 %
- Distributions made in the nature of Income - Rs.0.50 and Rs.0.32
& Capital gain (per unit respectively).
You are required to:
(1) Calculate the month end net asset value of the mutual fund scheme (limit
your answers to two decimals).
(2) Provide a brief comment on the month end NAV.
Solution
(1) Calculation of NAV at the end of month:
Given Annual Return = 15%
Hence Monthly Return = 1.25%
(NAV at end – NAV at beg) – Capital Dist + Capital Gain
HPY = Nav at Beg
(Nav at End – ` 65.78) + 0.50 + 0.32
0.0125 = 65.78
Nav at End = Rs.65.78
(2) There are no change in NAV
19 SFM - COMPILER

2013
Question 17 May 2013 RTP
Mr. A can earn a return of 16 per cent by investing in equity shares on his
own. Now he is considering a recently announced equity based mutual fund
scheme in which initial expenses are 5.5 per cent and annual recurring
expenses are 1.5 per cent. How much should the mutual fund earn to provide
Mr. A return of 16 per cent?
Solution
Indifference Point between direct return from the Fund
R1
R2 = 1 – Initial Expense + Re

R2 = Return from the Fund

R1 = Direct Return
Re = Recurring Expenses
In the above Question
R2 = Return from the Fund
R1 = 16%
Re = 1.5%
Initial Expenses = 5.5%
16
R2 = 1 – 0.055 + 1.5 = 18.43%
20 SFM - COMPILER

Question 18: May 2013 Paper – 10 Marks

Mr. Suhail has invested in three Mutual fund schemes as per details below:
Scheme X Scheme Y Scheme Z
Date of Investment 01.04.11 01.05.11 01.07.2011
Amount of Investment 12,00,000 4,00,000 2,50,000
Net Asset Value at entry date 10.25 10.15 10.00
Dividend received up to 23,000 6,000 Nil
31.07.2011
NAV as at 31.7.2011 10.20 10.25 9.90

You are required to calculate the effective yield on per annum basis in
respect of each of the three schemes to Mr. Suhail up to 31.07.2011.

Solution
MF A MF B MF C
Date of Investments 1/4/11 1/5/11 1/7/07
Amount of 12,00,000 4,00,000 2,50,000
Investment
NAV on entry Date 10.25 10.15 10
Units Received 12,00,000 4,00,000 2,50,000
10.25 10.15 10
= 1,17,073.17 = 39,408.86 = 25,000

Dividend Received 23,000 6,000 Nil

Dividend Per Unit 23,000 6,000 Nil
1,17,073 = 0.19645 39,408.86 = 0.15
NAV at 31/3/2007 10.2 10.25 9.90
Holding Period 4 months 3 months 1 month
HPY 0.19645 – 0.05 0.15 + 0.1 –0.1
10.25 x 100 10.15 x 100 10 x 100
= 1.42878% = 2.46% = 1%
MMY 1.42878 x 3 = 4.28463% 2.46 x 4 = 9.85% 1 x 12 = – 12%
EAY (1 + 0.0142878)3– 1 (1.0246)4 – 1 (1.01)12 – 1
= 4.34787% = 10.21% = – 12.6825%
21 SFM - COMPILER

Question 19 - May 2013 Paper – 8 Marks

On 1-4-2012 ABC Mutual Fund issued 20 lakh units at Rs.10 per unit.
Relevant initial expenses involved were Rs.12 lakhs. It invested the fund so
raised in capital market instruments to build a portfolio of Rs.185 lakhs. During
the month of April 2012 it disposed off some of the instruments costing Rs.60
lakhs for Rs.63 lakhs and used the proceeds in purchasing securities for Rs.56
lakhs. Fund management expenses for the month of April 2012 was Rs.8 lakhs
of which 10% was in arrears. In April 2012 the fund earned dividends
amounting to Rs.2 lakhs and it distributed 80% of the realized earnings. On 30-
4-2012 the market value of the portfolio was Rs.198 lakhs.
Mr. Akash, an investor, subscribed to 100 units on 1-4-2012 and disposed
off the same at closing NAV on 30-4-2012. What was his annual rate of earning?
Solution
Amount in Amount in Amount
lakhs lakhs lakhs
Opening Bank (200 - 185 -12) 3.00
Add: Proceeds from sale of 63.00
securities
Add: Dividend received 2.00 68.00
Deduct:
Cost of securities purchased 56.00
Fund management expenses 7.20
paid (90% of 8)
Capital gains distributed = 80% 2.40
of (63 – 60)
Dividend distributed =80% of 1.60 67.20
2.00
Closing Bank 0.80
Closing market value of 198.00
portfolio
198.80
Less: Arrears of expenses 0.80
Closing Net Assets 198.00
Number of units (Lakhs) 20
Closing NAV per unit 9.90
Rate of Earning (Per Unit)
Amount
Income received (2.40 + 1.60)/20 Rs.0.20
Loss: Loss on disposal (200 - 198)/20 Rs.0.10
Net earning Rs.0.10
Initial investment Rs.10.00
22 SFM - COMPILER

Rate of earning (monthly) 1%

Rate of earning (Annual) 12%

Question 20 -
Nov 2013 - RTP – Similar to - Question 15 - May 2012 Paper
Question 21: Nov 2013 Paper – 5 Marks
On 01-07-2010, Mr. X Invested Rs.50,000/- at initial offer in Mutual
Funds at a face value of ` 10 each per unit. On 31-03-2011, a dividend was paid
@ 10% and annualized yield was 120%. On 31-03-2012, 20% dividend and
capital gain of Rs.0.60 per unit was given.
Mr. X redeemed all his 6271.98 units when his annualized yield was
71.50% over the period of holding.
Calculate NAV as on 31-03-2011, 31-03-2012 and 31-03-2013. For
calculations consider a year of 12 months.

Solution
9 months 1 yr 1 Yr

1/7/2010 31/3/2011 31/3/2012 31/3/2013

Yield P.A 120% ? 71.50%

Units 5000 ? ? 6,271.98

Dividend NA 10% 20% NIL

(0.6 Capital Gain)

NAV 10 X Y
Z
Before we start calculation for NAV, first we need to understand that
investor is following dividend reinvestment plan because units are seen to be
increasing from 5,000 to 6,271.98 at the end of the period.
23 SFM - COMPILER

Calculation for First 9 months

Let the NAV on 31.3.2011 be X
Return from 1/7/2010 to 31.3.2011 (9 months) = 120 / 12 x 9 = 90%
Dividend Dist. + Capital Gain Dist. + Capital Appreciation
HPY= Purchase Price x 100

1(10% of 10) + (X – 10)

90 = 10 x 100

Therefore X = 18
Dividend = 5,000 x 1 = 5,000
Amount Reinvested = 5,000
Units Received = 5,000 / 18 = 277.78 units
Total Units = 5,000 + 277.77 = 5,277.78

Calculation for First 1 yr

1 yr 1 Yr

31/3/2011 31/3/2012 31/3/2008

Units 5,277.78 ? 6,271.98

Dividend 10% 20% NIL

(0.6 Capital Gain)

NAV 18 Y
Z
Note : Units standing on 31/3/2012 would be the same as on 31/3/2013
because dividend was received on 31/3/2012 which would have been reinvested
and units would have increased.
Dividend Received = 5,277.78 x 10 x 20% = 10,555.56
Capital Gain = 5,277.78 x 0.6 = 3,166.668
Total Amount Reinvested = 10,555.56 + 3,166.668 = 13,722.228
Units added = 6,271.98 – 5,277.78 = 994.2
Amount at which it was reinvested, which would the NAV
= 13,722.228 / 994.2 = 13.80 NAV
24 SFM - COMPILER

Last 3 months
1 yrs

31/3/2012 31/3/2013

Yield P.A 71.50%

6,271.98 6,271.98

NIL

NAV 13.80 Z
Return = 71.50%
Z – 13.80
71.50 = 13.80 x 100
Z = 23.667

2014
Question 22: May 2013 RTP
A Mutual Fund having 300 units has shown its NAV of Rs.8.75 and Rs.9.45
at the beginning and at the end of the year respectively. The Mutual Fund has
given two options:
i. Pay Rs.0.75 per unit as dividend and Rs.0.60 per unit as a capital gain, or
ii. These distributions are to be reinvested at an average NAV of Rs.8.65 per
unit. What difference it would make in terms of return available and which
option is preferable?
Solution
i) Payout Plan
Dividend Dist. + Capital Gain Dist. + Capital Appreciation
HPY = Purchase Price x 100

0.75 + 0.60 + 0.70

HPY = 8.75 = 23.43 % P.A

ii) Reinvestment Plan

Amount Reinvested = (0.75 + 0.60) x 300 units = 405
Units at the beginning = 300 units
405
No of units Received = 8.65 = 46.8208 units

Total Units = 300 + 46.8208 units = 346.8208 units

346.8208 x 9.45 - 300 x 8.75
Return = 300 x 8.75 = 24.86% P.A

Decision : Dividend Reinvestment Plan is better than dividend payout Plan

25 SFM - COMPILER

Question 23 : May 2014 Paper – 8 Marks

Based on the following data, estimate the Net Asset Value (NAV) on per unit
basis of a Regular Income Scheme of a Mutual Fund:
Rs. (in lakhs)
Listed Equity shares at cost (ex-dividend) 40.00
Cash in hand 2.76
Bonds & Debentures at cost of these, Bonds not listed 8.96
& not quoted 2.50
Other fixed interest securities at cost 9.75
Dividend accrued 1.95
Amount payable on shares 13.54
Expenditure accrued 1.76
Current realizable value of fixed income securities of face value of Rs.100 is
Rs.96.50.
Number of Units (Rs.10 face value each): 275000
All the listed equity shares were purchased at a time when market portfolio
index was 12,500. On NAV date, the market portfolio index is at 19,975.
There has been a diminution of 15% in unlisted bonds and debentures
valuation.
Listed bonds and debentures carry a market value of Rs.7.5 lakhs, on NAV date.
Operating expenses paid during the year amounted to Rs.2.24 lakhs.
Solution
Particulars Adjustment Value
Rs.lakhs
Equity Shares 63.920
Cash in hand 2.760
Bonds and debentures not listed 2.125
Bonds and debentures listed 7.500
Dividends accrued 1.950
Fixed income securities 9.409
Sub total assets (A) 87.664
Less: Liabilities
Amount payable on shares 13.54
Expenditure accrued 1.76
26 SFM - COMPILER

Sub total liabilities (B) 15.30

Net Assets Value (A) – (B) 72.364
No. of units 2,75,000
Net Assets Value per unit (Rs.72.364 lakhs / 2,75,000) Rs.26.3142

Question 24 : Nov 2014 RTP – Similar to - Question 20 - May 2013

Paper – 8 Marks
Question 25 : Nov 2014 Paper – 4 Marks
Cinderella Mutual Fund has the following assets in Scheme Rudolf at the
close of business on 31st March, 2014.

Company No. of Shares Market Price Per Share

Nairobi Ltd. 25000 Rs.20
Dakar Ltd. 35000 Rs.300
Senegal Ltd. 29000 Rs.380
Cairo Ltd. 40000 Rs.500
The total number of units of Scheme Rudolf are 10 lacs. The Scheme
Rudolf has accrued expenses of Rs.2,50,000 and other liabilities of
Rs.2,00,000. Calculate the NAV per unit of the Scheme Rudolf.
Solution
Shares No of Shares Price Amount (`)
Nairobi Ltd. 25,000 20 5,00,000
Dakar Ltd. 35,000 300 1,05,00,000
Senegal Ltd. 29,000 380 1,10,20,000
Cairo Ltd. 40,000 500 2,00,00,000
4,20,20,000
Less : Accrued Expenses 2,50,000
Other Liabilities 2,00,000
Total Value 4,15,70,000
No of Units 10,00,000
NAV Per unit (4,15,70,000 / 10,00,000) 41,57

2015
Question 26 - May 2015 Paper – Similar to - Question 1 – Nov 2008
– RTP
Question 27 – Nov 2015 Paper – 8 Marks – Similar to - Question 2 -
May 2009 - RTP
27 SFM - COMPILER

Question 28 Nov 2005 – 12 Marks

Note : This question is inserted because author feels this is important for
students to solve – Thanks
Sun Moon Mutual Fund (Approved Mutual Fund) sponsored open-ended
equity oriented scheme "Chanakya Opportunity Fund". There were three plans
viz. 'A'- Dividend Re-investment Plan, 'B' - Bonus Plan & 'C'- Growth Plan.
At the time of Initial Public Offer on 1-4-1995, Mr. Anand, Mr. Bachhan &
Mrs. Charu, three investors invested Rs. 1,00,000 each and chose 'B', 'C' & 'A'
Plan respectively.
The History of the Fund is as follows :
Date Dividend Bonus Net Asset Value per Unit
(%) Ratio (FV Rs, 10)
Plan A Plan B Plan C
28-07-1999 20 30.70 31.40 33.42
31-03-2000 70 5:4 58.42 31.05 70.05
31-10-2003 40 42.18 25.02 56.1$
15-03-2004 25 44.45 29.10 64.28
31-03-2004 1:3 42.18 20.05 60.12
24-03- 40 1:4 48.10 19.95 72.40
2005
31-07-2005 53.75 22.98 82.07

On 31 st July all three investors redeemed all the balance units. Calculate
annual rate of return to each of the investors.
Consider:
a. Long-term Capital Gain is exempt from Income tax.
b. Short-term Capital Gain is subject to 10% Income tax.
c. Security Transaction Tax 0.2 percent only on sale/redemption of units.
d. Ignore Education Cess.
Solution
Plan A – Dividend Reinvestment Plan

Date NAV Dividend Units Cumulative

Amount Received Units Held
1/4/95 10 - 10,000 10,000
28/7/99 30.7 20,000 651.47 10,651.47
31/3/2000 58.42 74,560 1276.28 11,927.75
30/10/2003 42.18 47,711 1131.13 13,058.88
15/3/2004 44.45 32,647.20 702.85 13,761.73
28 SFM - COMPILER

24/03/2005 48.10 55,046.92 1144.43 14,906.16

Redemption Price = 53.75 – 0.2% = 53.6425
Redemption Proceeds = 14,906.16 x 53.6425 = 7,99,604
- short term Capital Gain tax @10%
1144.43 (53.64 – 48.10) 634
Net Realization 7,98,970

7,98,970
Return = 1,00,000 = 124
(1 + r) 12
3
7,98,970 31
Return = 1,00,000 – 1 = 22.28%

Plan B – Bonus Plan

Date Bonus Units Purchased Cumulative Units

Held
1/4/99 - 10,000 10,000
31/3/2000 5:4 12,500 22,500
31/3/2004 1:3 7,500 30,000
24/3/2005 1:4 7,500 37,500
Redemption Price = 22.98 – 0.2% = 22.93
Redemption Proceeds = 37,500 x 22.93 = 8,60,027
– short term Capital Gain tax @10%
7,500 (22.93 – Nil) 17,198
Net Realization 8,42,829
8,42,829
Return 1,00,000 = 124
(1 + r) 12
3
8,42,829 31
Return = 1,00,000 – 1 = 22.92%

Plan C – Growth Plan

Redemption Price = 82.07 – 0.2% = 81.90586

Redemption Proceeds = 10,000 x 81.90586 = 8,19,059
– short term Capital Gain tax @10% NIL
Net Realization 8,19,059
29 SFM - COMPILER

8,19,059
Return 1,00,000 = 124
(1 + r) 12
3
8,19,059 31
Return = 1,00,000 – 1 = 22.58%

Question 29 Nov 2015 – Paper

Mr. X on 1.7.2012, during the initial public offer of a Mutual Fund (MF)
invested Rs.1,00,000 at Face Value of Rs.10. On 31.3.2013, the MF declared a
dividend of 10% when Mr. X calculated that his holding period return was 115%.
On 31.3.2014, MF again declared a dividend of 20%. On 31.3.2015, Mr. X
redeemed all his investment which had accumulated to 11,296.11 units when
his holding period return was 202.17%.
Calculate the NAVs as on 31.03.2013, 31.03.2014 and 31.03.2015.

Solution
Yield for 9 months = 115%
Market value of Investments as on 31.03.2013
= 1,00,000/- + (1,00,000x 115%)
= Rs.2,15,000/-

Therefore, NAV as on 31.03.2013 = (2,15,000-10,000)/10,000

= Rs.20.50
(NAV would stand reduced to the extent of dividend payout, being
(Rs.100,000 x 10%) = Rs.10,000)

Since dividend was reinvested by Mr. X, additional units acquired

10,000
= = 487.80 units
20.50

Therefore, units as on 31.03.2013 = 10,000+ 487.80 = 10,487.80

[Alternately, units as on 31.03.2013 = (2,15,000/20.50) = 10,487.80]
Dividend as on 31.03.2014 = 10,487.80 x 10 x 0.2
= Rs.20,975.60

Let X be the NAV on 31.03.2014, then number of new units reinvested will be
Rs.20,975.60/X. Accordingly 11296.11 units shall consist of reinvested
units and 10487.80 (as on 31.03.2013). Thus, by way of equation it can be
shown as follows:
20975.60
11296.11 = + 10487.80
X

Therefore, NAV as on 31.03.2014 = 20,975.60/(11,296.11- 10,487.80)

= Rs.25.95

NAV as on 31.03.2015 = Rs.1,00,000 (1+2.0217)/11296.11

= Rs.26.75
30 SFM - COMPILER

Question 30 Nov 2015 – Paper – 8 Marks

On 1st April, an open ended scheme of mutual fund had 300 lakh units
outstanding with Net Assets Value (NAV) of Rs.18.75. At the end of April, it
issued 6 lakh units at opening NAV plus 2% load, adjusted for dividend
equalization. At the end of May, 3 Lakh units were repurchased at opening NAV
less 2% exit load adjusted for dividend equalization. At the end of June, 70% of
its available income was distributed.
In respect of April-June quarter, the following additional information are
available:
Rs.in lakhs
Portfolio value appreciation 425.47
Income of April 22.950
Income for May 34.425
Income for June 45.450

You are required to calculate

(i) Income available for distribution;
(ii) Issue price at the end of April;
(iii)repurchase price at the end of May; and
(iv) net asset value (NAV) as on 30th June.

Solution
Calculation of Income available for Distribution
Units Per Unit Total
(Lakh) (Rs.) (Rs.in lakh)
Income from April 300 0.0765 22.9500
Add: Dividend equalization 6 0.0765 0.4590
collected on issue
306 0.0765 23.4090
Add: Income from May 0.1125 34.4250
306 0.1890 57.8340
Less: Dividend equalization paid on 3 0.1890 (0.5670)
repurchase
303 0.1890 57.2670
Add: Income from June 0.1500 45.4500
303 0.3390 102.7170
Less: Dividend Paid 0.2373 (71.9019)
303 0.1017 30.8151

Calculation of Issue Price at the end of April

Rs.
Opening NAV 18.750
Add: Entry load 2% of Rs.18.750 (0.375)
19.125
Add: Dividend Equalization paid on Issue Price 0.0765
19.2015
Calculation of Repurchase Price at the end of May

Rs.
Opening NAV 18.750
Less: Exit load 2% of Rs.18.750 (0.375)
18.375
31 SFM - COMPILER

Add: Dividend Equalization paid on Issue Price 0.1890

18.564
Closing NAV

Rs.(Lakh)
Opening Net asset value (Rs.18.75 x 300) 5625.0000
Portfolio Value Appreciation 425.4700
Issue of Fresh Units (6 x 19.2015) 115.2090
Income Received (22.950 + 34.425 + 45.450) 102.8250
6268.504
Less: Units repurchased (3 x 18.564) -55.692
Income Distributed -71.9019 (-127.5939)
Closing Net Asset Value 6140.9101
Closing Units (300 + 6 - 3) lakh 303 lakh
‫ ؞‬Closing NAV as on 30th June Rs.20.2670

Question 31 May 2016 – RTP

Orange purchased 200 units of Oxygen Mutual Fund at Rs.45 per unit on 31st
December,2009. In 2010, he received Rs.1.00 as dividend per unit and a capital
gains distribution of Rs.2 per unit.
Required:
(i) Calculate the return for the period of one year assuming that the NAV
as on 31st December 2010 was Rs.48 per unit.
(ii) Calculate the return for the period of one year assuming that the NAV
as on 31st December 2010 was Rs.48 per unit and all dividends and
capital gains distributions have been reinvested at an average price of
Rs.46.00 per unit.
Ignore taxation.
Solution
(i) Returns for the year
(All changes on a Per -Unit Basis)
Change in Price: Rs.48 – Rs.45 = Rs.3.00
Dividends received: Rs.1.00
Capital gains distribution Rs.2.00
Total reward Rs.6.00
6.00
Holding period reward: x 100 = 13.33%
45

(ii) When all dividends and capital gains distributions are re-invested into
additional units of the fund @ (Rs.46/unit)

Dividend + Capital Gains per unit = Rs.1.00 + Rs.2.00 = Rs.3.00

Total received from 200 units = Rs.3.00 x 200 = Rs.600/-
Additional Units Acquired = 600/46
= 13.04 Units.
Total No. of Units = 200 + 13.04
= 213.04 units.
Value of 213.04 units held at the end of the year
= 213.04 units x Rs.48
= Rs.10225.92
32 SFM - COMPILER

Price Paid for 200 Units at the beginning of the year

= 200 units x Rs.45
= Rs.9000.00
Holding Period Reward Rs.(10225.92 – 9000.00) = Rs.1225.92
𝟏𝟐𝟐𝟓.𝟗𝟐
Holding Period Reward = x 100 = 13.62%
𝟗𝟎𝟎𝟎

Question 32 May 2016 – Paper – 6 Marks

Calculate the NAV of a regular income scheme on per unit basis of Red Bull
mutual fund from the following information:
Particulars Rs.in crores
Listed shares at cost (ex - dividend) 30
Cash in hand 0.75
Bonds & Debentures at cost (ex - interest) 2.30
Of these, bonds not listed & not quoted 1.0
Other fixed interest securities at cost 2.50
Dividend accrued 0.8
Amount payable on shares 8.32
Expenditure accrued 1.00
Value of listed bonds & debentures at NAV date 10
Number of units (Rs.10 face value) 30 lakhs
Current realizable value of fixed income securities
of face value of Rs.100 is 106.50
The listed shares were purchased when index was 7100
and the Present index is 9000
Unlisted bonds and debentures are at cost. Other fixed interest securities are
also at cost.
Solution
Particulars Adjusted Value
Rs. crores
Equity shares (30 x 9000/7100) 38.028
Cash in hand 0.75
Bonds & Debentures not listed 1.00
Bonds & Debentures listed 10.00
Dividend accrued 0.80
Fixed income securities 2.50
Sub total assets (A) 53.078
Less: Liabilities
Amount payable on shares 8.32
Expenditure accrued 1.00
Sub total liabilities (B) 9.32
Net assets value (A) – (B) 43.758
No. of units 30,00,000
Net assets value per unit (43.758 crore/30,00,000) Rs.145.86
33 SFM - COMPILER

Question 33 Nov 2016 – RTP

Based on the following data, estimate the Net Asset Value (NAV) on per unit
basis of a Regular Income Scheme of a Mutual Fund on 31-3-2015:
Rs. (in lakhs)
Listed Equity shares at cost (ex-dividend) 40.00
Cash in hand (As on 1-4-2014) 5.00
Bonds & debentures at cost of these, Bonds not listed 8.96
& not quoted 2.50
Other fixed interest securities at cost 9.75
Dividend accrued 1.95
Amount payable on shares 13.54
Expenditure accrued 1.76

Current realizable value of fixed income securities of face value of Rs.100 is

Rs.96.50.
Number of Units (Rs.10 face value each): 275000
All the listed equity shares were purchased at a time when market portfolio
index was 12,500. On NAV date, the market portfolio index is at 19,975.
There has been a diminution of 15% in unlisted bonds and debentures
valuation.
Listed bonds and debentures carry a market value of Rs.7.5 lakhs, on NAV date.
Operating expenses paid during the year amounted to Rs.2.24 lakhs.

Solution
Particulars Adjusted Value
Rs. crores
Equity shares 63.920
Cash in hand (5.500 – 2.240) 2.760
Bonds & Debentures not listed 2.125
Bonds & Debentures listed 7.500
Dividend accrued 1.950
Fixed income securities 9.409
Sub total assets (A) 87.664
Less: Liabilities
Amount payable on shares 13.65
Expenditure accrued 1.76
Sub total liabilities (B) 15.30
Net assets value (A) – (B) 72.364
No. of units 2,75,000
Net assets value per unit (72.364 lakhs/2,75,000) Rs.26.3142
34 SFM - COMPILER

Question 34 Nov 2016 – Paper – 8 Marks

Mr. Abhishek is interested in investing Rs.2,00,000 for which he is considering
following three alternatives:
(i) Invest Rs.2,00,000 in Mutual Fund X (MFX)
(ii) Invest Rs.2,00,000 in Mutual Fund Y (MFY)
(iii) Invest Rs.1,20,000 in Mutual Fund X (MFX) and ` 80,000 in Mutual
Fund Y (MFY)

Average annual return earned by MFX and MFY is 15% and 14% respectively.
Risk free rate of return is 10% and market rate of return is 12%.

Covariance of returns of MFX, MFY and market portfolio Mix are as follow:
MFX MFY Mix
MFX 4.800 4.300 3.370
MFY 4.300 4.250 2.800
M 3.370 2.800 3.100

You are required to calculate:

(i) variance of return from MFX, MFY and market return,
(ii) portfolio return, beta, portfolio variance and portfolio standard
deviation,
(iii) expected return, systematic risk and unsystematic risk; and
(iv) Sharpe ratio, Treynor ratio and Alpha of MFX, MFY and Portfolio Mix

Solution
(i) Variance of Returns
𝐂𝐨𝐯 (𝐢.𝐣)
𝐂𝐨𝐫𝐢,𝐣 =
𝛔𝐢 𝛔𝐣

Accordingly, for MFX

𝐂𝐨𝐯 (𝐗,𝐗)
1=
𝛔𝐗 𝛔 𝐗

𝛔𝟐𝐱 = 4.800
Accordingly, for MFY
𝐂𝐨𝐯(𝐘,𝐘)
1=
𝛔𝐘 𝛔𝐘

𝛔𝟐𝐲 = 4.250
Accordingly, for Market return
𝐂𝐨𝐯 (𝐌,𝐌)
1=
𝛔𝐌 𝛔 𝐌

𝛔𝟐𝐌 = 3.100
35 SFM - COMPILER

(ii) Portfolio return, beta, variance and standard deviation

𝟏,𝟐𝟎,𝟎𝟎𝟎
Weight of MFX in portfolio = = 0.60
𝟐,𝟎𝟎,𝟎𝟎𝟎
𝟖𝟎,𝟎𝟎𝟎
Weight of MFY in portfolio = = 0.40
𝟐,𝟎𝟎,𝟎𝟎𝟎

Accordingly Portfolio Return

0.60 × 15% + 0.40 × 14% = 14.60%
Beta of each Fund
𝐂𝐨𝐯 (𝐅𝐮𝐧𝐝,𝐌𝐚𝐫𝐤𝐞𝐭)
β=
𝐕𝐚𝐫𝐢𝐚𝐧𝐜𝐞 𝐨𝐟 𝐌𝐚𝐫𝐤𝐞𝐭

𝟑.𝟑𝟕𝟎
𝛃𝐗 = = 1.087
𝟑.𝟏𝟎𝟎

𝟐.𝟖𝟎𝟎
𝛃𝐘 = = 0.903
𝟑.𝟏𝟎𝟎
Portfolio Beta
0.60 x 1.087 + 0.40 x 0.903
= 1.013

Portfolio Variance

σ2XY = WX2 σ2X +WY2 σ2Y + 2WX WY COVX.Y

= (0.60)2 (4.800) + (0.40)2 (4.250) + 2(0.60) (0.40) (4.300)

= 4.472

Or Portfolio Standard Deviation

σXY = √4.472
= 2.115

(iii) Expected Return, Systematic and Unsystematic Risk of Portfolio

Portfolio Return = 10% + 1.0134(12% - 10%) = 12.03%
MF X Return = 10% + 1.087(12% - 10%) = 12.17%
MF Y Return = 10% + 0.903(12% - 10%) = 28.06%
Systematic Risk = β2 σ 2

Accordingly,
Systematic Risk of MFX = (1.087)2 x 3.10 = 3.663
Systematic Risk of MFY = (0.903)2 x 3.10 = 2.528
Systematic Risk of Portfolio = (1.013)2 x 3.10 = 3.181

Unsystematic Risk = Total Risk – Systematic Risk

Accordingly,
36 SFM - COMPILER

Unsystematic Risk of MFX = 4.80 – 3.663 = 1.137

UnSystematic Risk of MFY = 4.250 – 2.528 = 1.722
UnSystematic Risk of Portfolio = 4.472 – 3.181 = 1.291

(iv) Sharpe and Treynor Ratios and Alpha

Sharpe Ratio
𝟏𝟓%−𝟏𝟎%
MFX = = 2.282
√𝟒.𝟖𝟎𝟎
𝟏𝟒%−𝟏𝟎%
MFY = = 1.94
√𝟒.𝟐𝟓𝟎
𝟏𝟒.𝟔%−𝟏𝟎%
Portfolio = = 2.175
𝟐.𝟏𝟏𝟓

Treynor Ratio
𝟏𝟓%−𝟏𝟎%
MFX = = 4.60
𝟏.𝟎𝟖𝟕
𝟏𝟒%−𝟏𝟎%
MFY = = 4.43
𝟎.𝟗𝟎𝟑
𝟏𝟒.𝟔%−𝟏𝟎%
Portfolio = = 4.54
𝟏.𝟎𝟏𝟑𝟒

Alpha
MFX = 15% - 12.17% = 2.83%
MFY = 14% - 11.81% = 2.19%
Portfolio = 14.6% - 12.03% = 2.57%

Question 35 - May 2017 – RTP – Similar to - Question 5 - Nov 2009

Paper
37 SFM - COMPILER

Question 36 Nov 2017 – RTP

Based on the following data, estimate the Net Asset Value (NAV) 1 st July 2016
on per unit basis of a Debt Fund:
Name Face Purcha Maturity No. of Coupon Duratio
of Valu se Date Securitie Date(s) n of
Securit e Price s Bonds
y Rs. Rs.
10.71% 100 104.78 31st 1,00,000 31st March 7.3494
GOI March,
2028 2028
10.% 100 100.00 31st 50,000 31st March 5.086
GOI March, & 30th
2023 2023 September
9.5% 100 97.93 31st 40,000 30th June & 4.3949
GOI December, 31st
2021 2021 December
8.5% 100 91.36 30th June, 20,000 30th June 6.5205
SGL 2025
2025
Number of Units (Rs.10 face value each): 100000
All securities were purchased at a time when applicable Yield to Maturity
(YTM) was 10%. On NAV date, the required yield increased by 75 basis point
and Cash in hand and accrued expenses were Rs.6,72,800 and Rs.2,37,400
respectively.

Solution
Working Notes:
(i) Calculation of Interest Accrued
Name of Security Maturity Date Amount (Rs.)
10.71% GOI 2028 100 x 100000 x 10.71% x
3 2,67,750
12
10% GOI 2022 100 x 50000 x 10.00% x
3 1,25,000
12
Total 3,92,750
Note: Interests on two remaining securities shall not be considered as last
interest was paid on 30.06.2016

(ii) Valuation of Securities

Name of Purchase Duratio Volatility (+)/(-) Total
Security Price n of Amount
Rs. Bonds (Rs.)
10.71% 1,04,78,0 7.3494 7.3494
× 0.75 -5,25,053 99,52,947
GOI 2028 00 1.10
= 5.0110
38 SFM - COMPILER

10.% 50,00,00 5.086 5.086

× 0.75 -1,81,645 48,18,355
GOI 2023 0 1.05
= 3.6329
9.5% 39,17,20 4.3949 4.3949
× 0.75 -1,22,969 37,94,231
GOI 2021 0 1.05
= 3.1392
8.5% 18,27,20 6.5205 6,5205
× 0.75 -81,230 17,45,970
SGL 2025 0 1.10
= 4.4456
2,03,11,503

Calculation of NAV
Particulars Rs.Crores
Value of Securities as computed above 2,03,11,503
Cash in Hand 6,72,800
Interest accrued 3,92,750
Sub total assets (A) 2,13,77,053
Less: Liabilities
Expenditure accrued 2,37,400
Sub total liabilities (B) 2,37,400
Net Assets Value (A) – (B) 2,11,39,653
No. of units 1,00,000
Net Assets Value per unit (Rs.2,11,39,653/1,00,000) Rs.211.40
39 SFM - COMPILER

Question 37 Nov 2017 – Paper

SBI mutual fund has a NAV of Rs.8.50 at the beginning of the year. At the end
of the year NAV increases to Rs.9.10. Meanwhile fund distributes Rs.0.90 as
dividend and Rs.0.75 as capital gains.
(i) What is the fund’s return during the year?
(ii) Had these distributions been re-invested at an average NAV of Rs.8.75
assuming 200 units were purchased originally? What is the return?

Solution
Return for the year (all changes on a per year basis)
Particulars Rs./unit
Changes in price (Rs.9.10 – Rs.8.50) 0.60
Dividend Received 0.90
Capital gain Distribution 0.75
Total Return 2.25

2.25
Return on investment = x 100 = 26.47%
8.50

If all dividends and capital gain are reinvested into additional units at Rs.8.75
per unit theposition would be.
Total amount reinvested = Rs.1.65 x 200 = Rs.330
Rs.330
Additional units added = = 37.71 units
8.75

Value of 237.71 units at end of year = Rs.2,163.16

Price paid for 200 units in beginning of the year (200 x Rs.8.50) = Rs.1,700
𝐑𝐬.𝟐,𝟏𝟔𝟑.𝟏𝟔−𝐑𝐬.𝟏,𝟕𝟎𝟎 𝐑𝐬.𝟒𝟔𝟑.𝟏𝟔
Return = = = 27.24%
𝐑𝐬.𝟏,𝟕𝟎𝟎 𝐑𝐬.𝟏,𝟕𝟎𝟎
40 SFM - COMPILER

Question 38 Nov 2017 – Paper

A reputed financial institution of the country floated a Mutual fund having a
corpus of Rs.10 crores consisting of 1 crore units of Rs.10 each. Mr. Vijay
invested Rs.10,000 for 1000 units of Rs.10 each on 1st July 2014. For the
financial year ended 31st March 2015, the fund declared a dividend of 10% and
Mr. Vijay found that his annualized yield from the fund was 153.33%. The
mutual fund during the financial year ended 31st March 2016, declared a
dividend of 20%. Mr. Vijay has reinvested the entire dividend in acquiring units
of this mutual fund at its appropriate NAV. On 31st march 2017 Mr. Vijay
redeemed all his balances of 1129.61 units when his annualized yield was
73.52%.
You are required to find out NAV as on 31st March 2015, 31st March 2016 and
31st March 2017.

Solution
Yield for 9 months = (153.33 x 9/12) = 115%
Market value of Investments as on 31.03.2015 = 10,000+(10,000×115%)
= Rs.21,500/-

Therefore, NAV as on 31.03.2015 = (21,500 - 1,000)/1,000

= Rs.20.50
NAV would stand reduced to the extent of dividend payout, being
(1,000×10×10%) = Rs.1,000)

Since dividend was reinvested by Mr. X, additional units acquired

Rs.1,000
= = 48.78 units
Rs.20.50

Therefore, units as on 31.03.2015 = 1,000+ 48.78 = 1048.78

[Alternately, units as on 31.03.2015 = (21,500/20.50) = 1048.78]
Dividend as on 31.03.2016 = 1048.78 x 10 x 0.2 = Rs.2,097.56

Let X be the NAV on 31.03.2016, then number of new units reinvested will be
Rs.2097.56/X. Accordingly 1129.61 units shall consist of reinvested units and
1048.78 (as on 31.03.2015). Thus, by way of equation it can be shown as
follows:
2097.56
1129.61 = + 1048.78
X

Therefore, NAV as on 31.03.2016 = 2097.56/(1,129.61- 1,048.78) = Rs.25.95

NAV as on 31.03.2017 = Rs.10,000 (1+0.7352x33/12)/1129.61 = Rs.26.75
41 SFM - COMPILER

Question 39 May 2018 – RTP

On 1-4-2012 ABC Mutual Fund issued 20 lakh units at Rs.10 per unit. Relevant
initial expenses involved were Rs.12 lakhs. It invested the fund so raised in
capital market instruments to build a portfolio of Rs.185 lakhs. During the
month of April 2012 it disposed off some of the instruments costing Rs.60 lakhs
for Rs.63 lakhs and used the proceeds in purchasing securities for Rs.56 lakhs.
Fund management expenses for the month of April 2012 were Rs.8 lakhs of
which 10% was in arrears. In April 2012 the fund earned dividends amounting
to Rs.2 lakhs and it distributed 80% of the realized earnings. On 30-4-2012 the
market value of the portfolio was Rs.198 lakhs.
Mr. Akash, an investor, subscribed to 100 units on 1-4-2012 and disposed off
the same at closing NAV on 30-4-2012. What was his annual rate of earning?

Solution
Amount in Amount in Amount in
Rs.lakhs Rs.lakhs Rs.lakhs
Opening Bank (200-185-12) 3.00
Add: Proceeds from sale of securities 63.00
Add: Dividend received 2.00 68.00
Deduct:
Cost of securities purchased 56.00
Fund management expenses paid 7.20
(90% of 8)
Capital gains distributed 2.40
= 80% of (63-60)
Dividend distributed 1.60 67.20
= 80% of 2.00
Closing Bank 0.80
Closing market value of portfolio 198.00
198.80
Less Arrears of expenses 0.80
Closing Net Assets 198.00
Number of units (Lakhs) 20
Closing NAV per unit (198.00/20) 9.90
Rate of Earning (Per Unit)
Amount
Income received (Rs.2.40+0Rs.1.60)/20 Rs.0.20
Loss: Loss on disposal (Rs.200 – Rs.198)/20 Rs.0.10
Net earnings Rs.0.10
Initial investment Rs.10.00
Rate of earning (Monthly) 1%
Rate of earning (Annual) 12%
42 SFM - COMPILER

Question 40 May 2018 – RTP

A mutual fund made an issue of 10,00,000 units of Rs.10 each on January 01,
2008. No entry load was charged. It made the following investments:
Particulars Amount
50,000 Equity shares of Rs.100 each @ Rs.160 80,00,000
7% Government Securities 8,00,000
9% Debentures (Unlisted) 5,00,0000
10% Debentures (Listed) 5,00,000
98,00,000

During the year, dividends of Rs.12,00,000 were received on equity shares.

Interest on all types of debt securities was received as and when due. At the end
of the year equity shares and 10% debentures are quoted at 175% and 90%
respectively. Other investments are at par.
Find out the Net Asset Value (NAV) per unit given that operating expenses paid
during the year amounted to Rs.5,00,000. Also find out the NAV, if the Mutual
fund had distributed a dividend of Rs.0.80 per unit during the year to the unit
holders.

Solution
Particulars Rs.
Cash balance in the beginning 2,00,000
(Rs.100 lakhs – Rs.98 lakhs)
Dividend Received 12,00,000
Interest on 7% Govt. Securities 56,000
Interest on 9% Debentures 45,000
Interest on 10% Debentues 50,000
15,51,000
(-) Operating expenses 5,00,000
Net cash balance at the end 10,51,000
Calculation of NAV Rs.
Cash Balance 10,51,000
7% Govt. Securities (at par) 8,00,000
50,000 equity shares @ Rs175 each 87,50,000
9% Debentures (Unlisted) at cost 5,00,000
10% Debentures @ 90% 4,50,000
Total Assets 1,15,51,000
No. of Unit 10,00,000
NAV per Unit Rs.11.55
Calculation of NAV, if dividend of Rs.0.80 is paid –
Net Assets (Rs.1,15,51,000 – Rs.8,00,000) Rs.1,07,51,000
No. of Units 10,00,000
NAV per unit Rs.10.75
43 SFM - COMPILER

Question 41 May 2018 – Paper – 5 Marks

The unit price of Equity Linked Savings Scheme (ELSS) of a mutual fund is
Rs.10/-. The public offer price (POP) of the unit is Rs.10.204 and the
redemption price is Rs.9.80.
Calculate:
(i) Front-end Load
(ii) Back end Load
Solution
i. Front End Load
10.204−10
× 100 = 2.04%
10

ii. Back End Load

10−9.8
× 100 = 2%
10

Question 42 May 2018 – Paper – 8 Marks

Mr. Y has invested in the three mutual funds (MF) as per the following details:
Particulars MF ‘X’ MF ‘Y’ MF ‘Z’
Amount of Investment (Rs.) 2,00,000 4,00,000 2,00,000
Net Assets Value (NAV) at the 10.30 10.10 10
time of purchase (Rs.)
Dividend Received up to 6,000 0 5,000
31.03.2018 (Rs.)
NAV as on 31.03.2018 (Rs.) 10.25 10 10.20
Effective Yield per annum as on 9.66 -11.66 24.15
31.03.2018 (Percent)

Assume 1 Year =365 days

Mr. Y has misplaced the documents of his investment. Held him in finding the
date of his original investment after ascertaining the following:
(i) Number of units in each scheme;
(ii) Total NPV;
(iii) Total Yield; and
(iv) Number of days investment held.

Solution
Particulars MF ‘X’ MF ‘Y’ MF ‘Z’
1. No. of Units 200000 400000 200000
Amount 10.30 10.10 10
= = 19,417.475 = 39,603.96 = 20,000
NAV
2. Net Asset at End 19,417.475 × 39,603 × 10 = 20,000 × 10.2 =
= Units × Closing NAV 10.25 = 1,99,029 3,96,040 2,04,000
3. Dividend Per Unit 6000
= 0.309 NIL 5000
= 0.25
19417.475 20000
4. Yield (10.25−10.30)+0.309 (10−10.10)
× 100
(10.25−10)+0.25
Div.dist.+Capital App 10.30 10.10 10
× 100 × 100 = 2.515% = 0.99% × 100 = 4.5%
Purchase Price
5. No of days 2.515 ×365 = 9.66 0.99×365= 11.66 365
4.5 × 𝑛 = 24.15
investment held 𝑛 𝑛
N = 95 days N = 31 days N = 68 days
44 SFM - COMPILER

Question 43 - May 2018 (New) – RTP – Similar to - Question 28 - Nov

2005 – 12 Marks
Question 44 – May 2018 (New) – Paper - 10 marks – Similar t0 -
Question 14 - May 2012 - Paper
Question 45 – Nov 2018 – RTP – Similar to - Question 30 -Nov 2015
– Paper – 8 Marks

Question 46 Nov 2018 – Paper – 5 Marks

During the year 2017 an investor invested in a mutual fund. The capitaql gain
and dividend for the year was Rs.3.00 per unit, which were re-invested at the
year end NAV of Rs.23.75. The investor had a total units of 26,750 as at the end
of the year. The NAV had appreciated by 18.75% during the year and there was
an entry load of Rs.0.05 at the time when the investment was made.
The investor lost his records and wants to find out the amount of investment
made and the entry load in the mutual fund.
Solution
Closing NAV = 23.75 which is 118.75%
Opening NAV = 23.75/118.75% = 20

Entry Load = 0.05

Therefore Purchase Price = 20 + 0.05 = 20.05

Let the opening units be X

𝐱×𝟑
‫؞‬ = 26,750 – x
𝟐𝟑.𝟕𝟓

‫؞‬3x = 6,35,312.5 – 23.75x

‫؞‬X = 23,750

Amount invested = 23,750 x 20.05 = Rs.4,76,187.5

Entry Load = 23,750 x 0.05 = Rs.1,187.5
45 SFM - COMPILER

Question 47 Nov 2018 – Paper – 8 Marks

A Mutual fund raised Rs.150 lakhs on April 1, 2018 by issue of 15 lakh units at
Rs.10 per unit. The fund invested in several capital market instruments to build
a portfolio of Rs.140 lakhs. The initial expenses amounted to Rs.8 lakhs. During
the month of April, the fund sold certain instruments costing Rs.44.75 lakhs for
Rs.47 lakhs and used the proceeds to purchase certain other securities for
Rs.41.6 lakhs. The fund management expenses for the month amounted to Rs.6
lakhs of which Rs.50,000 was in arrears. The fund earned dividends amounting
to Rs.1.5 lakhs and it distributed 80% of the realized earnings. The market value
of the portfolio on 30th April, 2018 was Rs.147.84 lakhs.
An investor subscribed to 1000 units on April 1 and disposed it off at closing
NAV on 30th April. Determine his annual rate of earnings.
Solution
Issue = 15 lakhs units x 10 = 150

Portfolio 140 Cash 10

Less: Sold (44.75) Less: Exp (8)
Add: Purch 41.6 Add: Sale 47
Balance 136.85 Less: Purchase (41.6)
Less: Exp (5.5)
Market Value 147.85 Add: Div 1.5
Less: Div
(1.5 x 80%) (1.2)

(2.25 x 80%) (1.8)

Balance 0.4
(𝟏𝟒𝟕.𝟖𝟓+𝟎.𝟒)−𝟎.𝟓
NAV at End = 𝟏𝟓
= 9.85

𝐃𝐢𝐯𝐢𝐝𝐞𝐧𝐝 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧+𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐆𝐚𝐢𝐧 𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧+𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐀𝐩𝐩𝐫𝐞𝐜𝐢𝐚𝐭𝐢𝐨𝐧

HPY = x 100
𝐏𝐮𝐫𝐜𝐡𝐚𝐬𝐞 𝐏𝐫𝐢𝐜𝐞
𝟏.𝟐
Dividend Distribution = = 0.08 per unit
𝟏𝟓

𝟏.𝟖
Capital gain distribution = = 0.12 per unit
𝟏𝟓
𝟎.𝟎𝟖+𝟎.𝟏𝟐+(𝟗.𝟖𝟓−𝟏𝟎)
HPY = 𝟏𝟎
x 100 = 0.5% per month

𝟏𝟐
BEY = 0.5 x = 6% P.A.
𝟏

EAY (𝟏. 𝟎𝟎𝟓)𝟏𝟐 – 1 = 6.17% P.A.

46 SFM - COMPILER

Question 48 - Nov 2018 (New) – RTP – Similar to - Question 7 - May

2010 - Paper – 6 Marks
Question 49 - Nov 2018 – New – Paper – 8 Marks - Similar to –
Question no 22 – May 2013 RTP