SIE practice questioneasyOpen-End Mutual Funds
Which of the following best describes the net asset value (NAV) of an open-end mutual fund?
- AThe maximum offering price plus any applicable sales charges
- BThe value at which new shares are issued to the public
- CThe price set by supply and demand on the secondary market
- DThe value per share determined by dividing the total assets minus liabilities by the number of shares outstanding✓ Correct answer
Explanation
Why D — The value per share determined by dividing the total assets minus liabilities by the number of shares outstanding
NAV equals the fund assets minus liabilities, divided by shares outstanding. The maximum offering price may include a sales charge above NAV, while closed-end funds and ETFs trade at market prices.
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