A/An ________ sells shares at their NAV.
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A. B. C. D.Explanation
A no-load fund imposes no sales charges so it sells shares at their NAV, however some charge a small redemption fee of about half-percent.
The correct answer to the question is C. no-load fund.
A no-load fund is a type of investment fund that sells shares directly to investors without charging any sales load or commission fees. The term "load" refers to the sales charges or fees associated with buying or selling mutual fund shares.
When you invest in a mutual fund, you typically pay a sales load, which can be a front-end load or a back-end load. A front-end load is a fee charged when you initially invest in the fund, while a back-end load is a fee charged when you sell your shares. These fees are typically used to compensate financial advisors or brokers who sell the fund to investors.
However, a no-load fund does not charge any sales load or commission fees. This means that when you invest in a no-load fund, you buy the shares directly from the fund company at the net asset value (NAV) of the fund. The NAV represents the total value of the fund's assets minus its liabilities, divided by the number of outstanding shares. It is essentially the price at which the fund's shares are bought and sold.
Therefore, a no-load fund sells shares at their NAV, which is the price at which investors can buy or sell shares directly from the fund company without incurring any sales charges or commission fees. This makes no-load funds an attractive option for investors who want to avoid additional costs associated with buying or selling mutual fund shares.