SIE practice questionmediumMutual Funds
When does an investor in a mutual fund buy shares?
- ADirectly from the fund at the net asset value (NAV) plus any sales charge✓ Correct answer
- BFrom another investor in the secondary market
- CAt any price negotiated with a broker
- DFrom a bank underwritten offering
Explanation
Why A — Directly from the fund at the net asset value (NAV) plus any sales charge
Mutual fund shares are bought directly from the fund company at NAV plus sales charges. They are not secondary market securities.
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