An investor has Rs 10,000 to invest. He is considering the following funds, all of which have a NAV of Rs 10 per share. Closed end fund 'A' is…
BBA Investment Analysis · 2023 · Solved Question with Answer
An investor has Rs 10,000 to invest. He is considering the following funds, all of which have a NAV of Rs 10 per share. Closed end fund 'A' is selling for a market price that equals to a NAV whereas closed end fund 'B' is selling at a discount of 20%. The broker charges a commission of 2% on the market price for each share purchased. Mutual fund 'C' has a front end whereas mutual fund 'D' charges net 8.54% load.
a. How many shares does the investor end up in each case?
b. Which fund you should purchase?