Which of the following statements is true?
A)The net asset value equals the total market value of the assets of the fund.
B)The net asset value equals the total market value of the assets of the fund divided by the number of shares in the funds outstanding.
C)The net asset value equals the number of shares in the funds outstanding divided by the total market value of the assets of the fund.
D)The net asset value equals the total market value of the assets of the fund multiplied by the number of shares in the funds outstanding.

Question

Quizplus · Accepted Answer

The net asset value (NAV) of a mutual fund is calculated by dividing the total market value of the assets of the fund by the number of shares in the fund outstanding. This gives the per-share value of the fund. Option A is incorrect because the NAV is the value of the fund per share, not the total market value of the assets. Option C is incorrect because the NAV is not a ratio of shares to asset value. Option D is incorrect because it incorrectly multiplies the total market value of the assets by the number of shares, which would result in a value higher than the actual NAV.

Which of the Following Statements Is True