Answered

Nezzie invests in 300 shares of stock in the fund shown below.

\begin{tabular}{|c|c|c|}
\hline Name of Fund & NAV & Offer Price \\
\hline LKIT Mid-Cap & \[tex]$16.58 & \$[/tex]16.99 \\
\hline
\end{tabular}

Nezzie plans to sell all of her shares when she can profit \[tex]$5,000. What must the net asset value be in order for Nezzie to sell?

a. \$[/tex]16.67
b. \[tex]$33.25
c. \$[/tex]33.57
d. \$33.66



Answer :

GinnyAnswer
To determine the net asset value (NAV) at which Nezzie must sell her shares to achieve a profit of \[tex]$5,000, we will break the problem down step-by-step. 1. Initial Investment Calculation: - Nezzie initially buys 300 shares. - The initial NAV (Net Asset Value) per share is \$[/tex]16.58.
- To find the total initial value of her shares, we multiply the number of shares by the initial NAV:
[tex]\[ \text{Initial Value} = 300 \times 16.58 = 4973.999999999999 \][/tex]

2. Total Value Needed for Desired Profit:
- Nezzie wants to make a profit of \[tex]$5,000. - The total value needed is the initial investment plus the desired profit: \[ \text{Total Value Needed} = 4974 + 5000 = 9974.0 \] 3. Determine New NAV: - To find the new NAV at which Nezzie can sell her 300 shares to achieve the total value needed, we divide the total value needed by the number of shares: \[ \text{New NAV} = \frac{\text{Total Value Needed}}{\text{Number of Shares}} = \frac{9974}{300} = 33.24666666666667 \] So, according to the calculations, the net asset value at which Nezzie should sell her 300 shares to achieve a profit of \$[/tex]5,000 is approximately \[tex]$33.25. Thus, the correct answer is: b. \$[/tex]33.25

Other Questions