Question

The composition of the Fingroup Fund portfolio is as follows:

Stock	Shares			Price
A		200,000		$	41
B		282,000			35
C		409,000			29
D		590,000			40

The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $55,000. There are 3.3 million shares outstanding.

What is the net asset value of the fund? (Round your answer to 2 decimal places.)

Answer 1

Given the following information,

Stock	Shares	Price
A	2,00,000	41
B	2,82,000	35
C	4,09,000	29
D	5,90,000	40

Accrued management fee = $55,000

Number of shares outstanding = 3.3 million

In order to calculate the NAV, we have to first calculate the market value of each stock and add them, and market value of each stock is calculated by multiplying the shares with its share price.

The formula to calculate NAV is as follows,

NAV or Net Asset Value of the fund = (Market value of assets - management fee)/ No. of shares outstanding

We know that the market value of the assets is calculated by using the formula,

Market value of assets = sum product of the shares and its share price of the stock

substituting the above given values of stock in this formula, we get

Market value of assets = (2,00,000*41) + (2,82,000*35) + (4,09,000*29) + (5,90,000*40)

Market value of assets = (82,00,000) + (98,70,000) + (1,81,61,000) + (2,36,00,000)

Market value of assets = 5,35,31,000

Now,

NAV = (Market value of assets - Management fee)/ number of share outstanding

NAV = (5,35,31,000 - 55,000)/ 3300000

NAV = (5,34,76,000)/ 3300000

NAV = 16.20

Therefore, Net Asset Value of the fund = 16.20