Question

The net asset value is calculated by dividing the current _______ value of the fund's portfolio (reduced by liabilities) by the number of outstanding shares.

Answer 1

The net asset value is calculated by dividing the current assets value of the fund's portfolio (reduced by liabilities) by the number of outstanding shares.

What is net asset value (NAV)?

The worth of an investment fund is represented by its net asset value, or NAV, which is determined by adding up all of the fund's assets and deducting all of its liabilities.

• NAV is used by mutual funds and ETFs to determine the cost per share of the fund.

• The net asset value of an investment fund is calculated by dividing the number of outstanding shares by the net value of the fund's assets less its liabilities.
• Commonly, NAV is used to compute the price per share of a mutual fund or ETF.
• The closing market values of the securities in the portfolio are used to determine NAV at the conclusion of each trading day.

• A pooled investment security called an exchange-traded fund (ETF) functions very similarly to a mutual fund.
• ETFs often follow a certain sector, index, commodity, or other asset, but unlike mutual funds, they can be bought or sold on a stock exchange just like conventional stocks.
• Anything from the price of a single commodity to a sizable and varied group of securities can be tracked by an ETF.
• ETFs may even be designed to follow particular investment strategies.

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