Question

A mutual fund's holdings are determined to be 1,500,000,000 with 250,000,000 in liabilities and 100,000,000 shares outstanding. What is the fund's NAV?

Answer 1

The net asset value (NAV) of the mutual fund is $12.50 per share.

Step-by-step explanation:

The net asset value (NAV) of a mutual fund is calculated by subtracting its liabilities from its total assets and then dividing by the number of shares outstanding. In this case, the total assets of the fund are $1,500,000,000 and the liabilities are $250,000,000. The net assets would be $1,500,000,000 - $250,000,000 = $1,250,000,000.

Dividing the net assets by the number of shares outstanding (100,000,000) gives us $1,250,000,000 / 100,000,000 = $12.50 per share. Therefore, the net asset value (NAV) of the mutual fund is $12.50 per share.