Only part 5 please

A mutual fund owns the following stocks: 18,000 shares of General Electric, 30,000 shares of IBM, and 55,000 shares of Exxon Mobile. The fund has to pay back-wages of $410,000 (an accured liability), and has issued 2 million shares to mutual fund shareholders. The fund will receive a dividend of $10 per share from its holdings of General Electric stock in two weeks, which the fund manager will reinvest by buying more shares of GE. Ignore tax effects.

The stock prices for GE, IBM, and Exxon are as follows, respectively:

Time	GE	IBM	Exxon
10am on day 1	668	123	240
End of day 1	671	118	247
14 days later	677	116	238

Part 1

What is the value of the fund's holdings of Exxon at the end of day 1?

Correct

Value of a stock position: V_E = P_E * Q_E = 247 * 55,000 = 13,585,000

Part 2

What is the total NAV (not per share) at the end of day 1?

Correct

We need to calculate the value for GE and IBM, too: V_GE = P_GE * Q_GE = 671 * 18,000 = 12,078,000 V_I = P_I * Q_I = 118 * 30,000 = 3,540,000.

Total net asset value: NAV = V_E + V_GE + V_I - Liabilites = 13,585,000 + 12,078,000 + 3,540,000 -410,000 = 28,793,000

Part 3

What is the NAV per share at the end of the day?

Correct

NAV per share=NAVNumber of shares issued=28,793,0002,000,000=NAV per share=NAVNumber of shares issued=28,793,0002,000,000= 14.4

Part 4

If you place an order to buy 100 shares in the fund at 10am on day 1, how much will you have to pay in total?

Correct

Shares in mutual funds are sold (and bought back) at the NAV at day's end (after the end of trading).

You have to pay 100 * $14.4 = $1,439.65.

Part 5

What's the return to an investor if they submit a buy order at 10am on day 1 and then hold for 14 days? Back wages are now $328,000 after 2 weeks.