Question

An open-end fund has a net asset value of $11.80 per share. It is sold with a front-end load of 4%. What is the offering price? (Round your answer to 2 decimal places.)

Answer 1

The offering price of an open-end fund with a NAV of $11.80 per share and a front-end load of 4% is $12.29 per share.

Step-by-step explanation:

To calculate the offering price of an open-end fund with a net asset value (NAV) per share and a front-end load, you would use the following formula:

Offering Price = NAV / (1 - front-end load percentage)

In this scenario, the NAV is $11.80 per share and the front-end load is 4%. Therefore, we can calculate the offering price as follows:

Offering Price = $11.80 / (1 - 0.04) = $11.80 / 0.96 = $12.29

When rounded to two decimal places, the offering price would be $12.29 per share.