For the following problems, imagine an ETF called zee which is made up of two stocks: 50 shares of company Xpeanut butter and 100 shares of company Ychocolate. Bank AA is an Authorized Participant for zee and any creation or redemption process.

A. Initially a creation unit of 1,000 shares of zee are sold to bank AA as the Authorized Participant in exchange for 50 shares of X and 100 shares of Y which are trading at $5 and $10, respectively. What is the initial NAV of ETF zee?

B. Bank AA sells the 1,000 shares of zee, the creation unit, on the market as an index composite of company X and Y. Investors love it. Two great tastes in one stock. Zee sells out that day at $2.00 per share, while X remains at $5.00 and Y remains at $10.00. What will bank AA try to do the next day as the Authorized Participant of shares of zee?