header bg

Scan QR code or get instant email to install app

Question:

Compared to its net asset value (NAV) calculated in accordance with accounting standards, a hedge fund’s trading NAV:

A will be lower because of adjustments for illiquid positions.
explanation

If a fund calculates a trading NAV, it will adjust market prices downward for securities in which it holds positions that are large relative to trading volume or total value outstanding and thus are less liquid.