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A mutual fund has 1,000 shares of Doggie Corp

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A mutual fund has 1,000 shares of Doggie Corp. currently trading at $10, and 500 shares of Kitty, Inc., currently trading at $15. The fund has 2,000 shares outstanding. Investors expect the price of Doggie Corp. to increase to $14 and the price of Kitty Inc. to decline by the end of the year. Thus a new NAV.

Assume that the price of Doggie Corp. shares is realized at $14. What is the maximum price to which Kitty Inc. can decline and still maintain the original NAV?

A.$ 7.00

B.$15.45

C.$8.75

D.$12.45