NAV is equal to the
A) current market value of a mutual fund's portfolio minus the mutual fund's liabilities divided by the number of outstanding shares.
B) current market value of a share of common stock multiplied by the number of outstanding shares divided by the company's sales.
C) current market value of a company divided by the number of outstanding shares offered by that company.
D) current market value of a mutual fund's portfolio minus the mutual fund's administrative costs divided by the number of outstanding shares.
E) previous market value of a mutual fund's portfolio adding the revenue generated by the fund during a 12-month period.

Question

Quizplus · Accepted Answer

NAV stands for Net Asset Value, which is the current market value of a mutual fund's portfolio minus the mutual fund's liabilities divided by the number of outstanding shares. This calculation provides the per share value of the mutual fund. Option B is incorrect as it calculates the market capitalization of a company, not NAV. Option C also calculates the market capitalization, not NAV. Option D is incorrect as administrative costs are not subtracted from the portfolio value to calculate NAV. Option E is incorrect as NAV reflects the current market value, not the previous market value.

NAV Is Equal to the