Assume that the beginning of a day a mutual fund portfolio has a value of Rs. 1 million with no liabilities, and there are 10,000 shares outstanding.…
BBS Management of Financial Institutions · 2079 · Solved Question with Answer
Assume that the beginning of a day a mutual fund portfolio has a value of Rs. 1 million with no liabilities, and there are 10,000 shares outstanding.
a. What is the NAV per shares at the beginning of the day?
b. Assume that during the day Rs. 5000 is deposited into the fund. Rs. 1000 is withdrawn and the prices of all the securities in the portfolio remain constant. What is the change in the number of shares at the end of the day?
c. What is total number of shares outstanding at the and of the day?
d. What is the total value of the portfolio of the company at the end of the day?
e. What is the new NAV per share at the end of the day?
f. Further suppose that during the day the value of the portfolio doubles to Rs. 2 million. How would your answer to part (a)?