FRM Part I · FRM Exam Part I · Fund Management
An open-end mutual fund has total assets of $252 million and liabilities of $12 million. It has 8 million shares outstanding. What is the NAV per share?
The NAV per share is $30.00, found by subtracting liabilities of $12 million from assets of $252 million to get $240 million of net assets, then dividing by 8 million shares outstanding.
- A$31.50
- B$30.00Correct
- C$29.00
- D$32.50
Explanation
NAV = (assets - liabilities) / shares = (252 - 12) / 8 = $30.00. Using total assets only gives $31.50, which ignores liabilities and is wrong.
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