What term describes the current per-share value of a mutual fund, computed as assets minus liabilities?

What term describes the current per-share value of a mutual fund, computed as assets minus liabilities?

• A. Total Net Worth
• B. Net Asset Value
• C. Fund Equity
• D. Share Price

Answer: (B)

Net Asset Value is the term that describes the current per-share value of a mutual fund, calculated as assets minus liabilities. In practice, you compute NAV per share by taking the fund’s total assets minus its total liabilities to get net assets, then dividing by the number of shares outstanding. This per-share value is what investors use to buy or redeem fund shares, typically at the end of the trading day after the markets close. It differs from a stock’s share price, which can fluctuate intraday; mutual fund transactions occur at the daily NAV. Other terms like total net worth or fund equity aren’t the standard way to describe a mutual fund’s per-share price, and “share price” can be misleading for mutual funds since their price is based on NAV.

Net Asset Value is the term that describes the current per-share value of a mutual fund, calculated as assets minus liabilities. In practice, you compute NAV per share by taking the fund’s total assets minus its total liabilities to get net assets, then dividing by the number of shares outstanding. This per-share value is what investors use to buy or redeem fund shares, typically at the end of the trading day after the markets close. It differs from a stock’s share price, which can fluctuate intraday; mutual fund transactions occur at the daily NAV. Other terms like total net worth or fund equity aren’t the standard way to describe a mutual fund’s per-share price, and “share price” can be misleading for mutual funds since their price is based on NAV.