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(i) The table below shows the composition of ABC Mutual Fund's assets Stock 3 announces record earnings, and the price of stock 3 jumps to

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(i) The table below shows the composition of ABC Mutual Fund's assets Stock 3 announces record earnings, and the price of stock 3 jumps to 37.20 in after-market trading. If the fund (illegally) allows investors to buy at the current NAV, how many shares ll 30,000 buy? (Assume 5,000 shares are outstanding) (ii) If the fund waits until the price adjusts, how many shares can be purchased? What is the gain to such illegal trades? ABC Mutual Fund Assets Stock Shares owned Price 2 4 Cash 1,000 5,000 2,800 9,200 3,000 n.a E 1.92 51.18 E 29.08 E 67.19 4.51 5,353.40

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