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
A is correct; purchases and redemptions occur at the next computed NAV after the order is placed. B is incorrect because the price is forward-looking. C and D describe methods for pricing ETFs/closed-end funds or are inaccurate.
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