Multiple choice

In an open-ended fund, NAV per unit is Rs. 11, entry load is 2%. An investor invests Rs. 110, she will get

  1. less then 10 units

  2. 10 units

  3. more than 10 units

  4. 11 units
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

With a 2% entry load, only Rs. 107.80 of the original Rs. 110 investment actually purchases fund units (Rs. 110 × 0.98). At an NAV of Rs. 11 per unit, this yields 9.8 units, which is less than 10 units.

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