If there are 44 million shares outstanding, what is net asset value? If a large
ID: 2659616 • Letter: I
Question
If there are 44 million shares outstanding, what is net asset value?
If a large investor redeems 1 million shares, what is net asset value?
City Street Fund has a portfolio of $450 million and liabilities of $10 million.a.
If there are 44 million shares outstanding, what is net asset value?
Net asset value $
b-1. If a large investor redeems 1 million shares, what happens to the portfolio value? (Enter your answer in millions.)
Portfolio value (Click to select)increasesdecreases to $ million
b-2. If a large investor redeems 1 million shares, what happens to shares outstanding? (Enter your answer in millions.)
Shares outstanding (Click to select)increasesdecreases to $ million
b-3.
If a large investor redeems 1 million shares, what is net asset value?
Net asset value $
Explanation / Answer
a
Net Asset Value = Total Assets - Total Liabilities =
$450m - $10m = $440m
b1
The portfolio value decreases to 450m - (450m-10m)/44m*1m = $440m
b2
The number of outstanding share decreases to 43m
b3
The new net asset value = (440m-10m) = $430m