Question

1. An open-end mutual fund has the following stocks:

Stock	Shares	Stock Price
A	6,000	89
B	33,000	22
C	5,200	91
D	73,500	13

If there are 50,000 shares of the mutual fund, what is the NAV?

Suppose the fund in the previous problem has liabilities of $110,000. What is the NAV of the fund now?

In the previous problem (#2), assume the fund is sold with a 5.50 percent front-end load. What is the offering price of the fund?

A mutual fund sold $35 million of assets during the year and purchased $29 million in assets. If the average daily assets of the fund were $103 million, what was the fund turnover?

Answer 1

Stock	Shares	Stock Price	Value
A	6,000	89	534,000
B	33000	22	726,000
C	5,200	91	473,200
D	73,500	13	955,500
Total			2,688,700

(I) NAV = 2,688,700/ 50,000 = $54

(ii) NAV if the firm has liabilities = ( 2,688,700 - 110,000) / 50,000 = $52

(iii) Offer price with front load = $52 * ( 1+ 5.5%) = 54.41

(iv) Fund turnover % = Assets sold / Average daily assets = $35 / $103 = 33.98%