Question
Urgent Suppose today a mutual fund contains 2,000 shares of JPMorgan Chase, currently trading at $69.75, 1,000 shares of Walmart, currently trading at $68.10, and
Urgent
Suppose today a mutual fund contains 2,000 shares of JPMorgan Chase, currently trading at $69.75, 1,000 shares of Walmart, currently trading at $68.10, and 2,500 shares of Pfizer, currently trading at $36.50. The mutual fund has no liabilities and 10,000 shares outstanding held by investors. a. What is the NAV of the fund? b. Calculate the change in the NAV of the fund if tomorrow JPMorgans shares increase to $71, Walmarts shares increase to $73, and Pfizers shares decrease to $35. c. Suppose that today 1,000 additional investors buy one share each of the mutual fund at the NAV of $29.885. This means that the fund manager has $29,885 in additional funds to invest. The fund manager decides to use these additional funds to buy additional shares in JPMorgan Chase. Calculate tomorrows NAV given the same rise/fall in share values as assumed in part (b).
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