Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A mutual fund has 400 shares of General Electric, currently trading at $10, and 500 shares of Microsoft, Incorporated, currently trading at $35. The fund
A mutual fund has 400 shares of General Electric, currently trading at $10, and 500 shares of Microsoft, Incorporated, currently trading at $35. The fund has 1,200 shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places. (e.g., 32.16)) b. If investors expect the price of General Electric to increase to $20 and the price of Microsoft to decline to $14 by the end of the year, what is the expected NAV at the end of the year? (Round your answer to 2 decimal places. (e.g., 32.16)) c. Assume that the price of General Electric shares is realized at $20. What is the maximum price to which Microsoft can decline and still maintain the NAV as estimated in (a)? (Do not round intermediate calculations. Enter your answer to the nearest whole number.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started