$1$

Problem $17-2($LG $17-5)$

$25$ points

References

References

Open$-$end Fund A has $205$ shares of ATT valued at $$55$ each and $50$ shares of Toro valued at $$95$ each. Closed$-$end Fund B has $95$ shares of ATT and $92$ shares of Toro. Both funds have $1,000$ shares outstanding.

a$.$ What is the NAV of each fund using these prices? $($Round your answers to $3$ decimal places. $($e$.$g$.,32\mathrm{.}161))$

b$.$ If the price of ATT stock increases to $$56\mathrm{.}25$ and the price of Toro stock declines to $$92\mathrm{.}292,$ how does that impact the NAV of both funds? $($Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to $2$ decimal places. $($e$.$g$.,32\mathrm{.}16))$

c$.$ Assume that another $175$ shares of ATT valued at $$55$ are added to Fund $A.$ The funds needed to buy the new shares are obtained by selling $605$ more shares in Fund A$.$ What is the effect on Fund A$\text{'}$s NAV if the prices remain unchanged from the original prices?

$\backslash$table$[[,,,],[$a$.,$NAV of Fund $A,$$$16\mathrm{.}025,],[,$NAV of Fund B$,$$$13\mathrm{.}965,],[$b$.,\backslash$table$[[$Percentage change in NAV$],[$Fund A$]],,\%$