Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An investment fund has $ 2 million in cash and $ 8 million invested in securities . It currently has 3 million shares outstanding. a
An investment fund has $ million in cash and $ million invested in securities It currently has million shares outstanding.
a What is the NAV of this fund? Round your answer to decimal places. eg
b Assume that some of the shareholders decide to cash in their shares of the fund. How many shares, at its current NAV, can the fund take back without resorting to a sale of assets?
c As a result of anticipated heavy withdrawals, it sells shares of IBM stock currently valued at $ Unfortunately, it receives only $ per share. What is the net asset value after the sale? Round your answer to decimal places. eg
c What are the fund's cash assets after the sale? Enter your answers in millions rounded to decimal places. eg
d Assume after the sale of IBM shares, shares are sold back to the fund. What is the current NAV? Do not round intermediate calculations. Round your answer to decimal places. eg
d Is there a need to sell more stocks to meet this redemption?
Please help solve B through D
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