Final answer:
The statement that redemption on mutual fund shares affects the NAV is true, as redemptions can decrease the fund's total assets and potentially lower the NAV.
Step-by-step explanation:
Redemption on mutual fund shares affects the Net Asset Value (NAV). This statement is true. When investors redeem their shares, the fund manager must sell securities to meet the redemption. This selling can lead to capital gains or losses and also reduces the number of assets in the fund. Since the NAV is calculated by dividing the total value of the fund's assets by the number of outstanding shares, redemptions decrease the fund's total assets and thus can decrease the NAV if the assets are sold at a price lower than their valuation in the NAV calculation.