A mutual fund has 40,000 shares of Stock A at a price of $38 and 60,000 shares of Stock B at a price of $46. If the fund has 95,000 shares outstanding and total liabilities of $130,000, what is the NAV of the fund?

Question

Quizplus · Accepted Answer

To calculate the NAV, we need to first calculate the total value of the assets:
Total value of Stock A = 40,000 shares x $38 = $1,520,000
Total value of Stock B = 60,000 shares x $46 = $2,760,000
Total value of assets = $1,520,000 + $2,760,000 = $4,280,000

Next, we need to deduct the liabilities from the total value of assets:
Net asset value = (Total value of assets - Liabilities) / Number of outstanding shares
Net asset value = ($4,280,000 - $130,000) / 95,000
Net asset value = $4,150,000 / 95,000
Net asset value = $43.68

Therefore, the NAV of the fund is $43.68. Answer choice B is the correct option.

A Mutual Fund Has 40,000 Shares of Stock a at a Price