What does NAV indicate in financial terms?

NAV, or Net Asset Value, is a critical concept in finance, particularly in the context of mutual funds and investment companies. It represents the total value of an entity's assets minus its liabilities, providing a clear measure of the fund's worth per share or unit.

Investors use NAV to determine the value of their investment in a fund and to assess its performance over time. It is calculated by taking the total assets of the fund (which includes cash, stocks, bonds, and other securities) and subtracting any liabilities (like debts or operational costs). The resulting figure is then divided by the number of outstanding shares.

This metric is essential for investors because it helps them understand how much a share of the investment fund is worth at a given time. NAV is commonly reported at the end of each trading day, allowing investors to make informed buying or selling decisions based on accurate information.

The other terms presented in the choices do not have a recognized meaning in the context of investment valuation and are not used in the same capacity as NAV. As such, understanding the correct definition of NAV is vital for anyone involved in securities and investment practices.