Asked by Jaime Andres on Jun 28, 2024
Verified
Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle's NAV was $32.18, how many shares must have been held in the fund?
A) 21,619,346.92
B) 22,930,546.28
C) 24,860,161.59
D) 25,693,645.25
Pinnacle's NAV
The Net Asset Value of Pinnacle's investments, representing the total value of the entity's assets minus its liabilities.
Year-End Assets
The value of all assets held by an entity at the conclusion of a financial year.
Liabilities
Financial obligations or debts owed by a person or business to others, which must be settled over time through the transfer of economic benefits.
- Calculate and expound upon the net asset value (NAV) of mutual funds.
Verified Answer
HZ
Hengrui ZhangJun 30, 2024
Final Answer :
C
Explanation :
To find the number of shares held in the fund, we first calculate the net asset value (NAV) by subtracting liabilities from assets, which gives us the equity value. Then, we divide this equity value by the NAV per share.Equity value = Assets - Liabilities = $825,000,000 - $25,000,000 = $800,000,000.Number of shares = Equity value / NAV per share = $800,000,000 / $32.18 ≈ 24,860,161.59.
Learning Objectives
- Calculate and expound upon the net asset value (NAV) of mutual funds.