Suppose that a mutual fund has the following assets and… – BBS Management of Financial Institutions 2082 Solved

Suppose that a mutual fund has the following assets and liabilities

Asset/Liability	Rs
Stock (at current market value)	20,000,000
Bonds (at current market value)	10,000,000
Cash	500,000
Total value of assets	30,500,000
Less: Liabilities	300,000
Net worth	30,200,000

Number of outstanding shares: 1 million

a. What is the net asset value (NAV)?

b. If the value of stock held in portfolio rises by 10% and value of bond held in the portfolio falls by 2%, and cash and liabilities remain the same, what will be net asset value?

c. What will be the yield on your investment in the mutual fund if you purchase the mutual fund unit at NAV calculated in part 'a' and sell the unit at NAV calculated in part 'b'?

Suppose that a mutual fund has the following assets and liabilities Asset/Liability Rs Stock (at current market value) 20,000,000 Bonds (at current…

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