A mutual fund has 300 shares of General Electric, currently trading at $30, and 400 shares of
Question:
A mutual fund has 300 shares of General Electric, currently trading at
$30, and 400 shares of Microsoft, Inc., currently trading at $54. The fund has 1,000 shares outstanding. (LG 17-5)
a. What is the NAV of the fund?
b. If investors expect the price of General Electric to increase to $34 and the price of Microsoft to decline to $48 by the end of the year, what is the expected NAV at the end of the year?
c. Assume that the price of General Electric shares is realized at $34.
What is the maximum price to which Microsoft can decline and still maintain the NAV as estimated in (a)? LO.1
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Related Book For 
Financial Markets And Institutions
ISBN: 9781259919718
7th Edition
Authors: Anthony Saunders, Marcia Cornett
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