Answered: Consider a no-load mutual fund with…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 8FPE

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Question

Consider a no-load mutual fund with $457 million in assets and 12 million shares at the start of the year, and $520 million in assets and 13.21 million shares at the end of the year. During the year investors have received income distributions of $2.25 per share, and capital gains distributions of $1.57 per share. Assume that the fund carries no debt.

What is the NAV at the START of the year?

Group of answer choices

36.11

33.07

39.47

38.08

37.78

Expert Solution

Step 1

The term net asset value or NAV is the price per share of the securities of the mutual funds that the investors purchase. The investors do not receive shares in which the mutual fund has invested, but only the units equivalent to the investment of the investor.

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