Question

The New American Enterprise Mutual Fund's portfolio is valued at $120,000,000. The fund has liabilities of $4,000,000, and the investment company sponsoring the fund has issued 5,800,000 shares. What is the fund's net asset value?

a. $120
b. $58
c. $40
d. $30
e. $20

Answer 1

e. $20

Step-by-step explanation:

The net asset value (N) for The New American Enterprise Mutual Fund's portfolio is given by the funds total value ($120,000,000) subtracted by its liabilities ($4,000,000) and then divided by the number of shares issued (5,800,000) .

`N = (\$120,000,000-\$4,000,000)/(5,800,000) \\N=\$20`

The fund's net asset value is $20