How is NAV calculated? What is NAV validation?

Question

Accepted Answer

NAV is calculated by subtracting liabilities from assets and dividing by the number of outstanding shares. NAV validation ensures accuracy of the calculated NAV.

NAV is calculated by taking the market value of assets, subtracting liabilities, and dividing by the number of outstanding shares.
For example, if a fund has $1,000,000 in assets, $100,000 in liabilities, and 100,000 outstanding shares, the NAV would be ($1,000,000 - $100,000) / 100,000 = $9.
NAV validation involves verifying the accuracy of the calculated NAV through various checks and reconciliations.
This process helps ensure that the NAV reported to investors is correct and reflects the true value of the fund.

How is NAV calculated? What is NAV validation?

Deutsche Bank Fund Accounting Analyst interview questions & answers