A mutual fund has 2,000 shares of ABC company, currently trading at Rs 60, and 1,000 shares of XYZ Company, currently trading at Rs 50. The fund has…
BBA Financial Markets and Services · 2025 · Solved Question with Answer
A mutual fund has 2,000 shares of ABC company, currently trading at Rs 60, and 1,000 shares of XYZ Company, currently trading at Rs 50. The fund has 10,000 shares outstanding.
a. What is the net asset value (NAV) of the fund?
b. If investors expect the price of ABC shares to increase to Rs 70 and the price of XYZ shares to decrease to Rs 45 by the end of the year, what is the expected NAV at the end of year?
c. Calculate holding period return if an investor purchases the mutual fund at the beginning of the year and sells at the end of the year.