Question

The composition of the Fingroup Fund portfolio is as follows: Stock Shares Price A 310,000 $ 35 B 410,000 40 C 510,000 15 D 710,000 20 The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $35,000. There are 5 million shares outstanding. What is the net asset value of the fund? (Round your answer to 2 decimal places.)

Answer 1

Answer:

The net asset value of the fund is $9.81.

Explanation:

Net Asset value is calculated by total net asset value of the portfolio divided by number of outstanding share.

Stock      Shares    Price    Total Value

A             310,000   $35     $10,850,000

B             410,000   $40     $16,400,000

C             510,000   $15     $7,650,000

D             710,000   $20    $14,200,000

Total      1,940,000            $49,100,000

Net Assets = Total portfolio value - Liabilities

The only liability is the accrued management fee of $35,000.

Net Assets = $49,100,000 - $35,000 = $49,065,000

Net asset value = Net asset / total outstanding shares

Net asset value = $49,065,000 / 5,000,000 = $9.813 = $9.81