Mutual funds are a popular investment option for individuals looking to diversify their portfolio and minimize risk. As a knowledgeable professor in the field of finance, it is important to understand the concept of "net asset value" or NAV when discussing mutual funds. Simply put, NAV is the current market value of a mutual fund share. This value is calculated daily by taking into account the fund's total assets, including securities, cash, and any accrued earnings, and deducting liabilities. The remaining amount is then divided by the number of units outstanding, giving us the NAV per share. This calculation is crucial for investors as it reflects the fund's performance and determines the price at which shares can be bought or sold.
