CHAPTER NISM VA 7

Which of the following represent the objective of fair valuation principle?

Valuation Shall Be Reflective of the Realizable Value of the Securities/Assets

The policies and procedures approved by the —–shall identify the methodologies that will be used for valuing each type of securities/assets held by the mutual fund schemes.

Disclosure of the Valuation Policy and Procedures Approved by the Board of the Asset Management Company Shall be Made in—

Traded securities other than money market and debt securities shall be valued at the last quoted closing price on the stock exchange

While calculating profits, all the expenses that relate to a period need to be considered, irrespective of whether or not the expense has been paid.

Income that relates to the period will boost profits, only if it is actually received in the bank account .

NAV=

Calculate the NAV Given the Following Information:•Value of Stocks: Rs. 150 Crore•Value of Bonds: Rs. 67 Crore•Value of Money Market Instruments: Rs. 2.36 Crore•Dividend Accrued but Not Received: Rs. 1.09 Crore•Interest Accrued but Not Received: Rs. 2.68 Crore•Fees Payable: Rs. 0.36 Crore•No. Of Outstanding Units: 1.90 Crore

Calculate the NAV given the following information:•Value of Stocks: Rs. 230 Crore•Value of Money Market Instruments: Rs. 5 Crore•Dividend Accrued but Not Received: Rs. 2.39 Crore•Amount Payable on Purchase of Shares: Rs. 7.5 Crore•Amount Receivable on Sale of Shares: Rs. 2.34 Crore•Fees Payable: Rs. 0.41 Crore•No. Of Outstanding Units: 2.65 Crore

The process of valuing each security in the investment portfolio of the scheme at its current market value is called—

The NAV is Meant to Reflect the True Worth of Each Unit of the Scheme

NAV is valued on mark to market basis.

Issuing fresh units at a price lower than the nav will result in the post issue nav —– for all investors . Redeeming units at price lower than the nav will —– the nav for the remaining investors.

Any expense other than investment advisory fee and recurring expenses shall be borne by:

In case of an index fund scheme or exchange traded fund, the total expense ratio of The scheme including the investment and advisory fees shall not exceed —- per cent of the daily net assets.

The total expense ratio of equity oriented scheme(s) shall not exceed —- per cent of the daily net assets of the scheme.

In the calculation of distributable reserves which of the following is considered:[I ]All the Profits Earned are Treated as Available for Distribution [Ii] Valuation Gains are Ignored. But Valuation Losses Need to Be Adjusted Against the Profits.[Iii] That Portion of Sale Price on New Units, Which Is Attributable to Valuation Gains, Is NotAvailable as a Distributable Reserve.

SEBI has banned entry loads

While charging exit loads, distinction will be made among unitholders on the basis Of the amount of subscription.

No exit load will be charged on bonus units and units allotted on reinvestment of dividend.

The accounts of the schemes not need to be maintained distinct from the accounts of the AMC.

As per the fair valuation principles laid out by SEBI,it is mandatory to disclose the valuation policy in ______.

Investors Have Bought 20 Crore Units of a Mutual Fund Scheme at Rs. 10 Each. The Scheme Has Thus Mobilized 20 Crore Units X Rs. 10 Per Unit I.E. Rs 200 Crore. An Amount of Rs. 140 Crore Is Invested in Equities. The Balance Amount of Rs 60 Crore, Mobilized from Investors, Was Placed in Bank Deposits.Interest and Dividend Receivable (Accrued but Yet Not Received) By the Scheme Is Rs 8 Crore, Scheme Expenses Payable (Accrued but Not Paid Yet) Is Rs 4 Crore. Calculate the Scheme’s NAV Per Unit.

In case of mutual fund schemes, dividends can be paid only out of _________.

Mutual funds are allowed to charge differential exit loads based on the amount of investment.