How Is a Mutual Fund's Net Asset Value Calculated

question 34

Short Answer

How is a mutual fund's net asset value calculated?

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Definitions:

Maturity

The date on which a financial instrument, such as a bond or loan, reaches its due date and the principal amount must be repaid.

Zero-Coupon Bonds

Debt securities that don't pay periodic interest but are issued at a significant discount to par value, providing profit at maturity when they reach their face value.

Coupon Rate

The annual interest rate paid by a bond's issuer to its holders, expressed as a percentage of the bond's face value.

Par Value

The face value of a bond or the stock value stated in the corporate charter, representing the minimum standard value.