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Answer: $37.47
## Calculation of Net Asset Value (NAV) **Step 1: Calculate Total Assets** - Equities: $1,100,000,000 - Bonds: $350,000,000 - Cash: $35,000,000 - **Total Assets = $1,100,000,000 + $350,000,000 + $35,000,000 = $1,485,000,000** **Step 2: Calculate Total Liabilities** - Management fees payable: $1,850,000 **Step 3: Calculate Net Assets** - **Net Assets = Total Assets - Total Liabilities** - **Net Assets = $1,485,000,000 - $1,850,000 = $1,483,150,000** **Step 4: Calculate NAV per Share** - Shares outstanding: 39,635,000 - **NAV = Net Assets ÷ Shares Outstanding** - **NAV = $1,483,150,000 ÷ 39,635,000 = $37.47** **Verification:** - $1,483,150,000 ÷ 39,635,000 = $37.47 (rounded to two decimal places) Therefore, the correct NAV is **$37.47**, which corresponds to **Option B**.
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Consider an open-end mutual fund that owns $1.1 billion in equities, $350 million in bonds, and $35 million in cash. They owe $1.85 million in management fees payable at this point in the quarter and they have 39.635 million shares outstanding. What is this fund's NAV?
A
$27.75
B
$37.47
C
$37.51
D
$37.42
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