Question

A portfolio manager’s client invests in a fund with total assets of $14,200,000, total liabilities of $1,500,000, and a total of 50,000 shares outstanding. Calculate the NAVPS for this fund. Answer using complete sentences.

Answer 1

Answer: $254

Step-by-step explanation:

The NAVPS (Net Asset Value Per Share) for the given fund can be calculated as the difference between the total assets and the total liabilities divided by the total number of shares outstanding:

NAVPS = (Total assets - Total liabilities) / Total shares outstanding

Substituting the given values, we get:

NAVPS = ($14,200,000 - $1,500,000) / 50,000

= $12,700,000 / 50,000

= $254

Therefore, the NAVPS for the given fund is $254 per share. This means that for every share held by the client, they own a portion of the underlying assets of the fund worth $254. It is important to note that the NAVPS may fluctuate over time as the value of the underlying assets and liabilities of the fund changes.