How is the Net Asset Value (NAV) of a mutual fund calculated?

The Net Asset Value (NAV) of a mutual fund is determined by taking the total market value of all the securities held in the fund's portfolio and subtracting any liabilities the fund may have, such as loans or other expenses. This net total is then divided by the number of outstanding shares of the fund.

This calculation effectively provides a per-share value of the fund, allowing investors to know how much each share represents in terms of the fund's overall value. By focusing specifically on the market value of owned securities and accounting for any debts, the correct process ensures that the NAV accurately reflects the fund's financial standing at any given moment.

Other options do not correctly represent the calculation method; for instance, including fees or total expenses without considering the full market value of the assets does not yield an accurate NAV assessment.