Multiple choice

Which of the follwing is/are true about NAV?

  1. The market price of a fund share is often higher or lower than the per share NAV.

  2. It is a mutual fund's price per share.

  3. It is an exchange-traded fund's (ETF) per-share value.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Net Asset Value (NAV) represents the per-share value of a mutual fund or ETF, calculated by dividing total assets minus liabilities by the number of shares. While it is the price for mutual fund transactions, the market price of an ETF or closed-end fund can trade at a premium or discount to its NAV. Thus, all statements provided are correct.

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