closed-ended mutual funds companies always buy their shares back from investors at NAV.
Related questions
A mutual fund has 600 shares of General Electric, currently trading at $14, and 600 shares of Microsoft, Inc., currently trading at $27. The fund has 1,500 shares outstanding.
| a. | What is the NAV of the fund? (Round your answer to 2 decimal places. (e.g., 32.16)) |
| NAV | $ |
| b. | If investors expect the price of General Electric to increase to $20 and the price of Microsoft to decline to $14 by the end of the year, what is the expected NAV at the end of the year? (Round your answer to 2 decimal places. (e.g., 32.16)) |
| Expected NAV | $ |
| c. | Assume that the price of General Electric shares is realized at $20. What is the maximum price to which Microsoft can decline and still maintain the NAV as estimated in (a)? (Do not round intermediate calculations.) |
| Maximum price | $ |
| A mutual fund has 500 shares of General Electric, currently trading at $12, and 500 shares of Microsoft, Inc., currently trading at $35. The fund has 2,000 shares outstanding. |
| a. | What is the NAV of the fund? (Round your answer to 2 decimal places. (e.g., 32.16)) |
| NAV | $ |
| b. | If investors expect the price of General Electric to increase to $20 and the price of Microsoft to decline to $14 by the end of the year, what is the expected NAV at the end of the year? (Round your answer to 2 decimal places. (e.g., 32.16)) |
| Expected NAV | $ |
| c. | Assume that the price of General Electric shares is realized at $20. What is the maximum price to which Microsoft can decline and still maintain the NAV as estimated in (a)? (Do not round intermediate calculations.) |
| Maximum price | $ |
