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SIE: Investment Companies & Packaged Products
SIE practice questionmediumMutual Funds - Pricing

When an investor places an order to buy mutual fund shares, the actual price paid is determined by:

  1. AA negotiated price between buyer and seller
  2. BEnd-of-day market price on an exchange
  3. CPrevious day's closing NAV
  4. DThe next computed NAV after the order is received✓ Correct answer
Explanation

Why DThe next computed NAV after the order is received

Mutual funds use forward pricing, so the order is filled at the next NAV after the order is received. B, C, and D do not apply to open-end mutual fund transactions.

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