SERIES-6 practice question 27 of 35
Steve Sharp sees a quote for a mutual fund that indicates the fund has a net asset value (NAV) of $26.60 and a public offering price (POP) of $28.00. Based on this, Mr. Sharp quickly ascertains that this fund must have:
Full set: 325 questionsCorrect Answer:
A. a front-end load of 5.0%.
Explanation
A mutual fund that is reported to have a NAV of $26.60 and a POP of $28.00 must have a front-end load of 5.0%. Front-end load = (POP - NAV)/POP = ($28.00 - $26.60)/$28.00 = 5.0%.
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