Suppose today a mutual fund contains 2,000 shares of J. P. Morgan Chase, currently trading at $
Question:
a. What is the NAV of the fund?
b. Calculate the change in the NAV of the fund if tomorrow J. P. Morgan’s shares increase to $ 50, Walmart’s shares increase to $ 73, and Pfizer’s shares increase to $ 30.
c. Suppose that today 1,000 additional investors buy one share each of the mutual fund at the NAV of $ 23.235. This means that the fund manager has $ 23,235 in additional funds to invest. The fund manager decides to use these additional funds to buy additional shares in J. P. Morgan Chase. Calculate tomorrow’s NAV given the same rise in share values as assumed in (b).
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Related Book For
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders, Marcia Cornett
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