Question
Most mutual funds invest money in hundreds of stocks, bonds, short-term securities, or other securities and assets; then, shares of the funds themselves are sold
Most mutual funds invest money in hundreds of stocks, bonds, short-term securities, or other securities and assets; then, shares of the funds themselves are sold to individual investors. To understand how the value of a mutual funds share is calculated based on the values of the assets it holds, consider the following simplified example of a mutual fund that owns shares of only four different stocks.
Stock Symbol | Current Market Price | Number of Shares | Total Value of Shares |
---|---|---|---|
MinT | $109.32 | 750 | $81,990.00 |
IntRA | 25.77 | 2,000 | 51,540.00 |
GMAR | 74.81 | 1,600 | 119,696.00 |
MajTrk | 39.21 | 800 | 31,368.00 |
You can see from the table that the market value of the funds assets is 1 . If the fund has $14,229.70 in liabilities and 2,000 shares outstanding, the net asset value (NAV) of a share in this mutual fund is 2 .
ANSWER OPTIONS
1:
$227,675.20
$313,053.40
$284,594.00
$256,134.60
2:
$162.22
$135.18
$124.37
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