What is NAV calculation, how to calculate NAV?

Question

Accepted Answer

NAV calculation is the process of determining the net asset value of a fund, which represents the value per share/unit.

NAV is calculated by subtracting the fund's liabilities from its assets.
Assets include investments, cash, and receivables, while liabilities include expenses and payables.
NAV = (Total Assets - Total Liabilities) / Total Shares/Units Outstanding.
NAV is typically calculated on a daily basis for mutual funds and other investment vehicles.
Example: If a fund has $10 million in assets, $2 million in liabilities, and 1 million shares outstanding, the NAV would be $8 per share.

Accepted Answer

NAV Stands for Net Asset Value of the Fund, which is the value of the Fund's assets minus Liabilities, divided by the number of shares outstanding. NAV calculation is used to determine the price per share of a Mutual Fund, or any other type of Investment Fund.

For example, let's say a mutual fund has assets worth $100 million, liabilities of $10 million, and 10 million shares outstanding. The NAV would be calculated as follows:

NAV = ($100 million - $10 million) / 10 million shares = $9 per share

What is NAV calculation, how to calculate NAV?

State Street Corporation Fund Accountant interview questions & answers

Popular interview questions of Fund Accountant