The Emerging Growth and Equity Fund is a lowload fund The cu

The Emerging Growth and Equity Fund is a “low-load” fund. The current offer price quotation for this mutual fund is $15.78, and the front-end load is 1.25 percent.

1.What is the NAV?

If there are 20 million shares outstanding, what is the current market value of assets owned by the fund?

Solution

1. Front end load = 1.25%. Offering price = $15.78

Now fron end load is the commission paid to the sales agents and brokers.

NAV = (1-front end load %)*offer price

= (1-1.25%)*15.78

= $15.58275

2. Now, market value of assets = NAV*number of shares outstanding

= 20 million * $15.58275

= $311.655 million or $311,655,000