Question

Suppose a mutual fund contains 6,500 shares of Intel currently trading at $25, 1,250 shares of Coca-Cola trading at $60 per share, and 1,600 shares of Verizon trading at $37.50 per share. If the mutual fund as 22,000 shares outstanding, what is the NAV of the fund?

Answer 1

The Net Asset Value (NAV) of the fund is calculated by dividing the total value of the assets by the number of shares outstanding.

Step-by-step explanation:

The Net Asset Value (NAV) of a mutual fund is calculated by dividing the total value of the fund's assets by the number of shares outstanding. In this case, the value of the fund's Intel shares is 6,500 * $25 = $162,500, the value of the Coca-Cola shares is 1,250 * $60 = $75,000, and the value of the Verizon shares is 1,600 * $37.50 = $60,000. Adding these values together gives a total asset value of $162,500 + $75,000 + $60,000 = $297,500. The NAV of the fund is then calculated by dividing the total asset value by the number of shares outstanding, which is $297,500 / 22,000 = $13.52 per share.