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On December 31 a mutual fund has the following assets and prices at 4:00 p.m. Stock Shares owned Price 1 1,000 $1.97 2 5,000 $48.26

  1. On December 31 a mutual fund has the following assets and prices at 4:00 p.m.

    Stock Shares owned Price
    1 1,000 $1.97
    2 5,000 $48.26
    3 1,000 $26.44
    4 10,000 $67.49
    5 3,000 $2.59

    Calculate the net asset value (NAV) for the fund. Assume that 8,000 shares are outstanding for the fund.

  2. On January 2 the prices at 4:00 p.m. are as follows:

    Stock Shares owned Price
    1 1,000 $2.03
    2 5,000 $51.37
    3 2,800 $29.08
    4 10,000 $67.19
    5 3,000 $4.42
    Cash n.a. $2,408.00

    Calculate the net asset value (NAV) for the fund.

  3. Assume the new investor then sells the 420 shares. What is his profit? What is the annualized return? The fund sells 800 shares of stock 4 to raise the needed funds. Assume 250 trading days per year.

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