Question

rochelle invests in 500 shares of stock in the fund shown below.

name of fund	nav	offer price

rochelle plans to sell all of her shares when she can profit $6,250. what must the net asset value be in order for rochelle to sell?
a. $12.50
b. $31.44
c. $31.64
d. $100.00

Explanation:

Step1: Recall Cost Basis

Rochelle bought 500 shares at the offer price of $19.14. So total cost is \( 500\times19.14 \).
\( 500\times19.14 = 9570 \)

Step2: Define Selling Value

Let the selling NAV be \( x \). Total selling value is \( 500x \). Profit is selling value - cost = 6250. So equation: \( 500x - 9570 = 6250 \)

Step3: Solve for x

Add 9570 to both sides: \( 500x = 6250 + 9570 \)
\( 500x = 15820 \)
Divide by 500: \( x=\frac{15820}{500}=31.64 \)

Answer:

c. $31.64