ProductsQuestion 3 of 110
A mutual fund has a net asset value of $9.30 per share and a sales charge of 7% of the public offering price. What is the public offering price?
a.$10.00
b.$9.95
c.$10.35
d.$10.65
Explanation
POP equals NAV divided by (100% minus the sales charge percentage), so $9.30 / 0.93 = $10.00. Adding 7% to the NAV gives $9.95, a common error because the sales charge is a percentage of the offering price, not of NAV. The other figures reflect sales charges well above the 7% stated.
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