Question

An investor buys 400 shares of stock in a fund when the net asset value is $23.79 and the offer price is $23.89. The investor sells these shares when the net asset value is $50.34 and the offer price is $50.46. Determine the amount of profit the investor earns.
a.
$10,580
b.
$10,620
c.
$10,628
d.
$20,136

Answer 1

Buy at the offer price $23.89 and redeem at the NAV $50.34.

Profit per share = 50.34 − 23.89 = 26.45
Total profit = 26.45 × 400 = $10,580

Answer: (a) $10,580