Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Consider a mutual fund(ex. Contrafund)
It has $10,000 in assets (stocks) and 250 shares are owned by people like you and I.
Which one of the following is false?.
The NAV = $40/share but will change if the market price of the stocks change
If a new customer buys 1 share the NAV will change (up or down)
If a new customer buys 1 share the PM will have more money to buy securities
If an existing customer sells a share the NAV will not change
When an existing customer sells their share(s), by law the Fund has to buy those shares
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