Mike and Sam contribute $1m each to start an open-end mutual fund. The fund is initially divided into 4 shares. The fund initially invests $0.5m in IBM, $1m in AAPL and holds $0.5m in cash.

Q: How many shares does each investor hold?

Q: What is the NAV per share of the fund?

After one year, IBM stock gains 10% and AAPL stock gains 5%. Interest on cash is 2% per year. Suppose the fund doesnt make any trade during the year. Suppose no share of the fund is purchased or redeemed during the year.

Calculate the new NAV per share.