Series 7 practice questionmediumPackaged Products — Mutual Funds
A mutual fund has total assets of $500 million, total liabilities of $10 million, and 20 million shares outstanding. What is the NAV per share?
- A$24.00
- B$25.50
- C$25.00
- D$24.50✓ Correct answer
Explanation
Why D — $24.50
NAV = (Total Assets - Total Liabilities) / Shares Outstanding = ($500,000,000 - $10,000,000) / 20,000,000 = $490,000,000 / 20,000,000 = $24.50 per share. This is the price at which investors can purchase or redeem shares of the open-end fund.
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