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A mutual fund is established with $50m assets in place, with 50m investment units each valued at $1. It borrows another $30m from a bank

A mutual fund is established with $50m assets in place, with 50m investment units each valued at $1. It borrows another $30m from a bank and invests these funds in Australian stocks. Ignoring the interest on the loan:

a) what would be the NAV of each investment unit if Australian stocks increase in value by:

80%

b) what would be the NAV of each investment unit if Australian stocks decrease in value by:

65%

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