Fund Offering Price Calculation

Explanation

The offering (ask) price = NAV / (1.0 - percent load) $10.25 / (1 - .075) = 11.08

To determine the offering price of a fund with a load, we need to consider the load percentage and the net asset value (NAV) of the fund.

In this case, the fund has a load of 7.5%, and the NAV is $10.25. The load is a fee charged by the fund company when an investor purchases shares of the fund. It is typically a percentage of the NAV.

To calculate the offering price, we need to add the load to the NAV. The load is calculated as a percentage of the NAV, so we can find the load amount by multiplying the NAV by the load percentage (in decimal form).

Load amount = NAV * Load percentage Load amount = $10.25 * 0.075 Load amount = $0.76875

Once we have the load amount, we can add it to the NAV to find the offering price.

Offering price = NAV + Load amount Offering price = $10.25 + $0.76875 Offering price = $11.01875

Rounding the offering price to two decimal places, we get $11.02.

Among the answer choices provided, the closest option to $11.02 is option E: 11.08.

Therefore, the correct answer is E. 11.08.