Question

3. At the beginning of trading on April 20, an open-end mutual fund with 7,000 shares outstanding owned 4,000 shares of Allstate and 6,000 shares of The Hartford. During the day, an investor bought 150 shares of the mutual fund. The fund manager bought 140 shares of Allstate with the proceeds from the sale of the mutual fund shares. At the end of trading on April 20, Allstate was selling for $125.10 and The Hartford was selling for $68.35. What was the mutual fund's net asset value (NAV) at the end of trading on April 20

Answer 1

$129.79

Step-by-step explanation:

Assets of mutual funds

Shares of Allstate = Total Shares * Selling Price

Shares of Allstate = [4000 + 140] * $125.10

Shares of Allstate = $517,914.

Shares of Hartford = Total Shares * Selling Price

Shares of Hartford = 6000 * $68.35

Shares of Hartford = $410,100.

Net Asset Value = Shares of Allstate + Shares of Hartford

Net Asset Value = $517,914 + $410,100

Net Asset Value = $928,014

Numbers of shares outstanding = 7,000 + 150

Numbers of shares outstanding = 7,150

Net Asset Value per Share = Net Asset Value / Numbers of shares outstanding

Net Asset Value per Share = $928,014/7,150

Net Asset Value per Share = $129.79

So, the mutual fund's net asset value (NAV) at the end of trading on April 20 is $129.79.