Nancy invested $1,850 in the MidFee Mutual Fund, which has a 4% front-end load. The net asset value (NAV) per share of the fund at the time of her purchase was $22.20.How many shares of the fund was Nancy able to purchase?
Explanation
Answer: B - If Nancy invested $1,850 in MidFee, which has a 4% front-end load, when the fund’s net asset value was $22.50, she was able to purchase 80.00 shares. The offer price of the fund = NAV/(1 - % load) = $22.20/(1 - 0.085) = $23.125. An investment of $1,850 would, therefore, purchase $1,850/$23.125 = 80 shares.
