Mutual Funds & DerivativesMCQQuestion 5770 of 6
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What is the purpose of a net asset value (NAV) in a mutual fund?

Options

ATo determine the fund's dividend payout
BTo calculate the fund's expense ratio
CTo determine the fund's market value
DTo calculate the fund's price per share
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Correct Answer

✅ Option D — To calculate the fund's price per share

All Options:

  • ATo determine the fund's dividend payout
  • BTo calculate the fund's expense ratio
  • CTo determine the fund's market value
  • DTo calculate the fund's price per share ✓

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Detailed Solution & Explanation

The net asset value (NAV) of a mutual fund is the total value of the fund's assets minus its liabilities, divided by the number of outstanding shares. It is used to calculate the price per share of the fund, which is the price at which investors can buy or sell shares.
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