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1.
A closed-end fund with a net asset value of 11 and a price of 12 is selling at a discount.
False. It is selling at one dollar above its net asset value.
2.
If a load mutual fund is quoted with a net asset value of 35 and a buy price of 36.25, what is its sales charge?
$1.25. The sales charge, or load, is the difference between the buy price and the net asset value.
3.
Net asset value is the price you pay for a share of a mutual fund.
False. It is the value of a share, and it is the price you get when you redeem a share. If the fund is a load fund, you must pay a sales charge in addition to the net asset value.
4.
Changes in the amount of cash a fund has to invest in securities can affect its net asset value by ______.
Altering the amount available for buying securities. This, in turn, can affect the total value of the fund's assets.
5.
How does a mutual fund's sales load affect its net asset value?
It doesn't affect it. A load is added to a net asset value when shares are sold, but it does not affect the net asset value itself.
