Final answer:
The net asset value according to Edelman in relation to mutual funds is defined as the total assets minus liabilities. It represents the net worth of a mutual fund and determines the price for buying and selling mutual fund shares.
Step-by-step explanation:
According to Edelman, when analyzing mutual funds, net asset value refers to total assets minus liabilities. Net asset value (NAV) signifies the net worth of a mutual fund, which is the excess of the asset value over and above the amount of the liability. It is a critical measurement because it determines the value at which investors can buy and sell shares of the fund.
In financial accounting, particularly in the context of a bank's T-account, the concept of net worth, or net asset value, is also used to denote the difference between the total assets and the total liabilities. This reflects the bank's financial health, with a positive net worth indicating a financially stable institution, a negative net worth could imply insolvency.