If a unit-linked fund has total assets of €20 million and acquisition costs of 2%, what is the fund's current unit price with 1,000,000 units?

To calculate the fund's current unit price, you need to take into account the total assets of the fund, the acquisition costs, and the total number of units available.

First, we start with the total assets of the unit-linked fund, which is €20 million. The acquisition costs are expressed as a percentage of the fund's total assets. In this case, the acquisition cost is 2%, which means that €20 million is reduced by this percentage to determine the effective funds available for unit pricing.

The acquisition costs amount to:

[

\text{Acquisition Costs} = 20,000,000 \times 0.02 = 400,000

]

Now, subtracting the acquisition costs from the total assets gives us the net value of the fund:

[

\text{Net Assets} = 20,000,000 - 400,000 = 19,600,000

]

Next, to find the current unit price, we divide the net assets by the number of units:

[

\text{Current Unit Price} = \frac{19,600,000}{1,000,000} = 19.60

]

Thus, the correct unit price, taking into consideration