Which term is defined as the per-share value of a mutual fund, derived from its assets minus its liabilities?

Which term is defined as the per-share value of a mutual fund, derived from its assets minus its liabilities?

• A. Asset Price Index
• B. Share Value
• C. Net Asset Value
• D. Net Income Value

Answer: (C)

Net Asset Value is the per-share value of a mutual fund. It’s calculated by subtracting the fund’s liabilities from its assets and then dividing by the number of shares outstanding. This yields the value of each share based on the fund’s holdings after any expenses. For example, if a fund has $1,000,000 in assets and $50,000 in liabilities, with 100,000 shares outstanding, the NAV per share would be (1,000,000 − 50,000) / 100,000 = $9.50. Mutual funds are bought and sold at this NAV price at the end of the trading day. Other terms like Asset Price Index, Share Value, or Net Income Value aren’t standard descriptors for a mutual fund’s per-share value.

Net Asset Value is the per-share value of a mutual fund. It’s calculated by subtracting the fund’s liabilities from its assets and then dividing by the number of shares outstanding. This yields the value of each share based on the fund’s holdings after any expenses.

For example, if a fund has $1,000,000 in assets and $50,000 in liabilities, with 100,000 shares outstanding, the NAV per share would be (1,000,000 − 50,000) / 100,000 = $9.50. Mutual funds are bought and sold at this NAV price at the end of the trading day.

Other terms like Asset Price Index, Share Value, or Net Income Value aren’t standard descriptors for a mutual fund’s per-share value.