PLEASE ANSWER THIS ONE:
QUESTION 6. A
mutual fund has 500 million-peso worth of stock, 50 million pesos
worth of bonds, and 10 million pesos in cash. The fund’s total
liabilities amount to 10 million pesos. There are 50 million shares
outstanding. You invest 150,000 pesos in this fund. (a) Calculate
the NAV. (b) How many shares will you purchase?
***Important note: The attached picture is for guidance
purposes; it is a sample problem to help you solve the
question
above and contains the expected method to be used in solving the
question.
- Please Answer This One Question 6 A Mutual Fund Has 500 Million Peso Worth Of Stock 50 Million Pesos Worth Of Bonds 1 (82.68 KiB) Viewed 14 times
Example: A mutual fund has 600 million-peso worth of stock, 5 million pesos worth of bonds, and 1 million pesos in cash. The fund's total liabilities amount to 2 million pesos. There are 25 million shares outstanding. You invest 15,000 pesos in this fund. (a) Calculate the NAV. (b) How many shares will you purchase? Solution: (a) NAV = A-L = 606,000,000-2,000,000 25,000,000 N = 24.16 pesos. Hence, the NAV of the fund is 24.16 pesos. (b) To find how many shares you will purchase, you must divide the amount invested by the cost per share of the fund and then round down to the nearest whole number. So, we have = 620. Hence, you must purchase 620 15,000 24.16 shares of the mutual fund.