A mutual fund is established with $50m assets in place, with 50m investment units each valued at
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Question:
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%
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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