Final answer:
To purchase one share of an open-end fund with a NAV of $16.70 per share and a 3% front-end load, the total cost would be $17.201.
Step-by-step explanation:
The student has asked to calculate the total cost for an investor to purchase one share of an open-end fund with a net asset value (NAV) of $16.70 per share and a front-end load of 3%. To find the total cost of one share, we first calculate the front-end load fee by multiplying the NAV by the load percentage. Then, we add this fee to the NAV to get the total cost.First, calculate the load fee: $16.70 * 0.03 = $0.501.Now, add the load fee to the NAV: $16.70 + $0.501 = $17.201.Therefore, the total cost for an investor to purchase one share would be $17.201.
To calculate the total cost for an investor to purchase one share of an open-end fund with a front-end load, we need to consider both the net asset value and the front-end load. The front-end load is a percentage charged by the fund as a sales charge when shares are purchased. In this case, the front-end load is 3%. Here are the steps to calculate the total cost:Take the net asset value of the fund, which is $16.70 per share, and multiply it by the front-end load percentage (3%).Convert the front-end load percentage to decimal form by dividing it by 100.