n NISM Certifications
V-A NISM Series V-A
Medium

How is the redemption transaction of a mutual fund priced?

Practice question from NISM Series V A - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    NAV plus exit load

  2. NAV minus exit load

    Correct answer

  3. C

    NAV plus entry load

  4. D

    NAV minus entry load

Why this is the answer

The redemption price of mutual fund units is calculated by deducting the exit load (if applicable) from the NAV. The exit load is a fee charged when units are sold or redeemed, and it reduces the amount the investor receives from the redemption.

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