The net asset value of a mutual fund is found by

Question

Quizplus · Accepted Answer

The net asset value (NAV) of a mutual fund is calculated by dividing the daily market value of the fund's total asset portfolio by the number of mutual fund shares outstanding. This determines the per-share value of the fund's assets. Expenses, commissions, and dividends are not factored into the calculation of NAV, as they are subtracted separately from the fund's total returns. Choice A is incorrect because it only calculates the change in value, not the entire value of the fund. Choice B is incorrect because it divides the cumulative value of all asset positions held by the fund by the total number of asset shares held by the fund, which does not take into account the daily market value of the fund's assets. Choice D is incorrect because it compares the fund to its peers, which is a separate metric used to evaluate the fund's performance. Choice E is incorrect because it incorrectly subtracts expenses, commissions, and dividends from the fund's total asset portfolio, which are separately deducted from the fund's returns.

The Net Asset Value of a Mutual Fund Is Found