question archive The emerging markets tund has the following stocks Stock Shares Price JP 15,000 $45
The emerging markets tund has the following stocks Stock Shares Price JP 15,000 $45
Subject:FinancePrice:2.86 Bought32
The emerging markets tund has the following stocks Stock Shares Price JP 15,000 $45.2 THM 4850 $137.1 YUV 7980 $67.09 1250 HG $27.65 The fund has $57,800 liabilities and there are 41,354 shares outstanding. The fund charges a 5.4% tront-end load. What is the offering price?
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The Public offering price of fund is the price at which a unit of the fund is sold at. It is calculated by adding the entry load charge to the NAV of each unit of the fund. The NAV per unit of a fund is calculated by dividing the total net assets of the fund by the total number of units outstanding of that fund. Net assets of the fund is the total assets minus the liabilities of the fund.
The assets of the fund given in the question are calculated as under:
|
|
A |
B |
C = A x B |
|
Stock |
No. of shares |
Price |
Total value |
|
JP |
15,000 |
$45.20 |
$678,000 |
|
THM |
4,850 |
$137.10 |
$664,935 |
|
YUV |
7,980 |
$67.09 |
$535,378 |
|
HG |
1,250 |
$27.65 |
$34,563 |
|
|
Total Assets |
$1,912,876 |
Total liabilities of the fund as given in the question are $57,800.
Net Assets of the fund = Total assets – Liabilities i.e. $1,912,876 - $57,800 = $1,855,076
Total units outstanding as given in the question is 41,354
Therefore, NAV per unit Net assets of the fund / total units outstanding i.e. $1,855,076 / 41,354 = $44.86
The Public Offering Price is calculated by adding the front end load to the NAV per unit.
The frond end load is 5.4% as given in the question.
The offering price is calculated by dividing the NAV per unit by a percentage which is equal to 100% - the front end load percentage
Therefore, Offering price = $44.86 / (100%-5.4%) i.e. $44.86/94.6% = $47.42.
