SIE practice questionmediumMutual Fund Pricing
Which statement best describes how open-end mutual funds are priced for purchases and redemptions?
- AAt a price determined by supply and demand
- BAt the previous day's closing price
- CAt the next NAV calculated after the order is received✓ Correct answer
- DAt a price set at the time of the fund’s creation
Explanation
Why C — At the next NAV calculated after the order is received
Open-end mutual fund purchases and redemptions are priced at the next NAV calculated after the order is received. Supply-and-demand pricing applies to exchange-traded products such as ETFs and closed-end funds.
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