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

Identify the TRUE statement: (1) While calculating scheme returns for an investor, if there is an entry load, then the initial value of the NAV is taken as NAV minus Entry Load. (2) While calculating scheme returns for an investor, if there is an exit load, then the later value of the NAV is taken as NAV minus Exit Load

Practice question from Nism VA Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Only 1 is true

  2. Only 2 is true

    Correct answer

  3. C

    Both 1 and 2 are true

Why this is the answer

Entry load is added to the NAV at the time of purchase (making the cost higher), while exit load is deducted from the sale NAV (reducing redemption value). Hence, only B is correct.

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