In mutual fund terminology, what is the full form of NAV in equity schemes?

Introduction / Context:
Investors in mutual funds, especially equity schemes, frequently encounter the term NAV. Understanding this term is essential for interpreting the performance and pricing of mutual fund units. NAV is a standard expression used in financial markets and is not limited to one country. This question simply asks you to expand the abbreviation NAV and thereby confirm your familiarity with basic mutual fund terminology.

Given Data / Assumptions:
- The context is equity schemes managed by mutual funds. - The abbreviation given is NAV. - Options provide several possible expansions, only one of which is correct in financial usage. - We assume standard mutual fund terminology as used by fund houses and regulators.

Concept / Approach:
NAV stands for Net Asset Value. In mutual funds, NAV per unit represents the market value of all assets held by the fund, minus its liabilities, divided by the number of outstanding units. It is effectively the price at which investors can buy or redeem fund units, subject to any entry or exit loads. The word net indicates that liabilities have been deducted from total assets. The other suggested expansions in the options do not correspond to any recognised financial term and are distractors for exam purposes.

Step-by-Step Solution:
Step 1: Recall common financial abbreviations used with mutual funds, such as AUM for assets under management and NAV for net asset value. Step 2: Match the letters N, A and V with the correct words. N stands for net, A for asset and V for value. Step 3: Compare this with the options and identify the one that spells out Net Asset Value. Step 4: Confirm that no other option has the same meaning or widespread acceptance in mutual fund documentation.

Verification / Alternative Check:
Any mutual fund fact sheet, offering document or financial news website will refer to NAV and usually describe it as net asset value. It is common to see statements such as the scheme's NAV rose from a lower amount to a higher amount over a certain period. You will not find references to nil accounting variation or new asset venture as standard abbreviations, which confirms that Net Asset Value is the correct expansion.

Why Other Options Are Wrong:
Nil Accounting Variation: This phrase has no established meaning in mutual fund reporting and does not match the letters NAV appropriately. New Asset Venture: While it uses the letters N, A and V, it is not a recognised financial term and does not describe how mutual funds are priced. Net Accounting Venture: This is not standard terminology in equity schemes and would not be used by fund houses or regulators.

Common Pitfalls:
Most candidates remember that NAV is related to mutual funds, but some may mix up the exact expansion if they have not seen it written out frequently. To avoid this, link NAV mentally to the formula net assets divided by units, reinforcing that N stands for net, A for asset and V for value. Also, distinguish NAV from related terms like market price, which is used for shares traded on stock exchanges.

Final Answer:
The correct option is Net Asset Value, because NAV in mutual fund and equity scheme terminology stands for the net asset value per unit of the fund.