# Schweser Qbank Question

Please, I don´t know why there are 25,000 shares if the sum of shares of A, B, C and D is 18700. The correct answer is letter “A”. Why is not “C”? Thanks a lot. Q#4280 The following table shows a mutual fund comprised of four stocks, each stock’s number of shares, and the price per share. Stock - Shares - Price A - 6,200 - \$10 B - 6,000 - \$34 C - 3,900 - \$8 D - 2,600 - \$52 Total Shares = 25,000 Assuming no liabilities, the net asset value (NAV) of this fund is: A) \$17.30. B) \$26.00. C) \$23.12. D) \$15.80.

Value of the mutual fund = \$6200*10 + \$6000*34 + \$3900*8 + \$2600*52 = \$432400 Value per share = \$432400/25000 = 17.296 = 17.30

Reread how a mutual fund operates. Investors pool their money together and that money is used to buy a portfolio of securites. The question gives you the number of shares and their prices of each investment in the portfolio. The 25,000 shares represent the outstanding shares of the mutual fund and will not equal the cumulative shares of it’s investments. Value of the a share of the mutual fund is the Net Asset Value/outstanding shares of the fund (not the investments). Shab.

Thanks a lot