Practice Quiz

FINRA Series 6

Category - Series 6

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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:
  1. $62 a share.
  2. $47 a share.
  3. $15 a share.
  4. This cannot be answered without knowing what, if any, the front-end load is.
Explanation
Answer: B - 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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