Question

The Closed Fund is a closed-end investment company with a portfolio currently worth $200 million. It has liabilities of $3 million and 5 million shares outstanding. a. What is the NAV of the fund?

Answer 1

$39.40

Step-by-step explanation:

According to the situation, the solution is as follows

The Net asset value of the fund is

= (Current worth of portfolio - liabilities) ÷ (outstanding shares)

= ($200 million - $3 million) ÷ (5 million shares)

= $39.40

Basically we applied the above formula in order to determine the net asset value of the fund.