Series 7 - General Securities Representative Exam

Preview Mode

If the POP is greater than the NAV of a mutual fund, which of the following must be true?

Investors can sell the fund at the POP
A
Investors can buy the fund at the NAV
B
Investors can buy the fund at the NAV and sell it at the POP
C
Investors can buy the fund at the POP and sell it at the NAV
D

Explanations

The POP includes the sales load. A customer can buy at the POP and sell at the NAV. They will face an immediate loss if they do this right after purchasing the fund. The fund must appreciate in value to cover the sales load

Pricing