An open end mutual fund has assets under management of $1,000,000,000 and liabilities of $50,000,000. At the end of today, there are 78,000,000 shares (or units) outstanding. The management expenses are $15,000,000 and the current rate of return for the fund is 7.5% (before taking out the MER).

a. Calculate the Net Asset Value Per Share (NAVPS) of the mutual fund at the end of today. (1 mark)

b. Provide two reasons why people would, and one reason why they wouldnt, purchase mutual funds (3 marks)