SERIES-6 practice question 26 of 35

The URMoney Mutual fund, a no load fund, has 10 million shares outstanding. The market value of its assets is $620 million and its liabilities are $150. Based on this information, an investor who wants to buy shares of the fund will pay:

Full set: 325 questions

Answer options

A: $62 a share.

B: $47 a share. Correct answer

C: $15 a share.

D: This cannot be answered without knowing what, if any, the front-end load is.

Correct Answer:

B. $47 a share.

Explanation

Based on the information provided, an investor who wants to buy shares of the URMoney Mutual Fund will pay $47 a share. Since the fund is a no load fund, the shares can be purchased at the net asset value per share of the fund. Net asset value per share (NAVPS) = (market value of fund’s assets
- fund liabilities) ÷ total number of share outstanding, so NAVPS = ($620 million - $150 million) ÷ 10 million shares = $47.

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