The offer price of an open-end fund is $18.00 and the fund is sold with a front-end load of 5%? What is the fund's NAV?

Name: The offer price of an open-end fund is $18.00 and the fund is sold with a front-end load of 5%? What is the fund's NAV?
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Question

Quizplus · Accepted Answer

The formula for calculating NAV is: 
NAV = Offer price / (1 + front-end load)

We are given: 
Offer price = $18.00
Front-end load = 5%

Plugging in values, we get: 
NAV = $18.00 / (1 + 0.05) = $17.10

Therefore, the answer is B.

The Offer Price of an Open-End Fund Is $18