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A mutual fund owns 700 shares of Facebook and 600 shares of Linkedln. The fund has 5,000 shares outstanding. Stock prices for Day 1 and

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A mutual fund owns 700 shares of Facebook and 600 shares of Linkedln. The fund has 5,000 shares outstanding. Stock prices for Day 1 and Day 2 are given below. At the end of Day 1 , investors sell 1,000 shares back to the mutual fund. The fund manager must give these investor's cash equal to the NAV times the number of shares owned. In order to pay investors, the fund manager must sell shares of Facebook and/or Linkedln at the Day 1 price. If the fund manager could perfectly predict the Day 2 stock prices, what would be the best trading strategy? Sell shares of only Facebook because the price will decline while the price of Linkedin will rise in Day 2 Sell shares of both Facebook and Linkedin, but sell more of Facebook because the stock price is greater at Day 1 Sell shares of both Facebook and Linkedin because the Day 2 prices are the same Sell shares of only LinkedIn because the stock price is less than the price of Facebook at Day 1

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