Assume that the price of general electric shares

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A mutual fund has 450 shares of General Electric, currently trading at $17, and 450 shares of Microsoft, Inc., currently trading at $25. The fund has 1,000 shares outstanding.

A. What is the NAV of the fund?

B. If investors expect the price of General Electric to increase to $20 and the price of Microsoft to decline to $14 by the end of the year, what is the expected NAV at the end of the year?

C. Assume that the price of General Electric shares is realized at $20. What is the maximum price to which Microsoft can decline and still maintain the NAV as estimated in (a)?

Reference no: EM131340147

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