Final answer:
The redemption price of a mutual fund with an NAVPU of $20 and a 3% sales charge is $19.40 per unit. To find this, you calculate 97% of the NAVPU, which accounts for the sales charge being subtracted.
Step-by-step explanation:
The question is asking about the redemption price of a mutual fund, which is different from purchasing or selling individual stocks. The redemption price is the amount you would receive when you sell your mutual fund shares. To calculate the redemption price, you need to consider the Net Asset Value Per Share (NAVPU) and the sales charge percentage.
To calculate the redemption price of a mutual fund, subtract the sales charge percentage from 100% to determine the percentage of NAVPU you will receive. In this case, with an NAVPU of $20 and a sales charge of 3%, you would receive 97% of the NAVPU:
100% - 3% = 97% 0.97 × $20 = $19.40
Therefore, the redemption price of the mutual fund is $19.40 per unit.