Question

The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $25,000. There are 4 million shares outstanding. What is the net asset value of the fund?

Answer 1

The original question about the net asset value of a fund cannot be answered due to insufficient information. Using a similar scenario, we can calculate how much more Alexx will have compared to Spenser after 30 years of investing $5,000 at different rates, due to the impact of a 0.25% retirement fund management fee.

Step-by-step explanation:

Calculation of Net Asset Value

The original question regarding the net asset value of a fund does not provide sufficient information to calculate the value and is therefore not answerable. However, we can discuss another related example from the provided reference information:

Both Alexx and Spenser invest $5,000 each in the same stock. Alexx invests directly and earns a 5% annual return, while Spenser goes through a retirement fund and has a 4.75% annual return after a 0.25% management fee. To calculate the difference in their investments' value after 30 years, we use the formula for compound interest:

Alexx's investment = P (1 + r/n)^(nt)
Spenser's investment = P (1 + r/n)^(nt)

Where:

P is the principal amount ($5,000)

r is the annual interest rate (5% for Alexx and 4.75% for Spenser)

n is the number of times interest is compounded per year (assuming 1 for simplicity)

t is the time the money is invested for (30 years)

After calculating the future value of both investments, we subtract Spenser's investment from Alexx's to find the difference:

Difference = Alexx's investment after 30 years - Spenser's investment after 30 years

This difference will show how much more Alexx will have than Spenser after 30 years due to the 0.25% lower fee that Spenser pays to the retirement fund.

Answer 2

$9.79

Step-by-step explanation:

The computation of the net asset value of the fund is shown below:

Net asset value of the fund = Equity ÷ Total outstanding shares

where,

Equity

= Total assets - total liabilities

where,

Total assets equal to

= 220,000 shares × $35 + 320,000 shares × $40 + 420,000 shares × $15 + 620,000 shares × $20

= $7,700,000 + $12,800,000 + $6,300,000 + $12,400,000

= $39,200,000

And, liabilities is $25,000

So, the net asset value of the fund equal to

= ($39,200,000 - $25,000) ÷ (4,000,000 shares)

= $9.79