SIE practice questioneasyOpen-end Mutual Funds - NAV
An investor buys shares of an open-end mutual fund at the public offering price (POP). What does the POP generally consist of?
- ANet asset value plus any applicable sales charge✓ Correct answer
- BMarket price minus commission
- CClosing price on the exchange
- DIssue price set by the underwriter
Explanation
Why A — Net asset value plus any applicable sales charge
The POP for mutual funds is the net asset value (NAV) plus any front-end sales charge. B is incorrect because mutual funds do not trade on exchanges; C and D do not accurately reflect how mutual fund prices are determined.
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