Mutual Funds and Other Investment Companies
Which of the following functions do mutual fund companies perform for their
A) Record keeping and administration
Diversification and divisibility
D) Lower transaction costs
All of the above.
Rationale: Mutual funds are attractive to investors because they offer all of the listed
Multiple Mutual Funds had year-end assets of $457,000,000 and liabilities of
There were 24,300,000 shares in the fund at year-end.
Multiple Mutual's Net Asset Value?
Rationale: (457,000,000 - 17,000,000) / 24,300,000 = $18.11
Diversified Portfolios had year-end assets of $279,000,000 and liabilities of
If Diversified's NAV was $42.13, how many shares must have been
held in the fund?
None of the above.
Rationale: ($279,000,000 43,000,000) / $42.13 = 5,601,708.996.
Bodie, Investments, Sixth Edition