Question

On august 31, aishwarya purchases $1,000 of the conquest european equity fund at a net asset value per unit (navpu) of $14. on december 15 of the same year, she decides to make another $1,000 purchase at a navpu of $12. on december 16, the mutual fund distributes to its unitholders $4 per unit. aishwarya's distributions are automatically reinvested back into units of the mutual fund. which of the following statements is correct (please round off to 2 decimal places)?a) $2,142.86

b) $2,045.45
c) $2,080.00
d) $2,222.22

Answer 1

Aishwarya purchased units of the Conquest European Equity Fund at different NAVPU rates, and received distributions that were automatically reinvested. The correct value of her investment can be calculated by subtracting the distributions from the total investment.

Step-by-step explanation:

To calculate Aishwarya's total investment, we need to consider the purchases and distributions made. On August 31, Aishwarya purchased $1,000 of the Conquest European Equity Fund at a NAVPU of $14. This means she bought 71.43 units (1,000 / 14 = 71.43). On December 15, Aishwarya made another $1,000 purchase at a NAVPU of $12, resulting in 83.33 additional units (1,000 / 12 = 83.33).

In total, Aishwarya owns 154.76 units (71.43 + 83.33 = 154.76). On December 16, the mutual fund distributed $4 per unit. Aishwarya's distributions would be $619.04 (154.76 units x $4).

To calculate the net asset value (NAV) after the distributions, we subtract the distribution amount from the total investment. The remaining NAV is $2,381.04 ($1,000 + $1,000 - $619.04 = $2,381.04).

Therefore, the correct answer is option D) $2,222.22.