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

Identify the TRUE statements with respect to measuring returns for mutual fund schemes. (A) The returns published in a mutual fund advertisement should factor in the entry or exit load (B) Compounded Annual Growth Rate (CAGR) is the accepted standard of showing returns for investment with a holding period of more than one year (C) Simple returns can be calculated by the formula: (Sale price – Cost price / Cost price) x 100

Practice question from Nism VA Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Only 1 and 2 are true

  2. Only 2 and 3 are true

    Correct answer

  3. C

    Only 1 and 3 are true

  4. D

    All 1, 2, and 3 are true

Why this is the answer

Returns published in mutual fund advertisements exclude entry or exit loads. CAGR is used for returns over one year, while simple returns are used for shorter periods.

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Nism VA Mock Test 4