You invested $4,500 in a mutual fund 38 months ago when the NAV of the fund was $31.80. You have not acquired or sold any shares since that time. Today, the NAV is $30.84. The fund charges contingent deferred sales charges of 6%, 5%, 4%, 3%, 2%, 2%, and 1% if the shares are redeemed within the first 7 years, respectively. How much money will you receive if you redeem your shares today?

Question

Quizplus · Accepted Answer

First, we need to calculate the current value of the investment:
$4,500 / $31.80 = 141.51 shares
141.51 shares * $30.84 NAV = $4,367.28

Next, we need to determine the contingent deferred sales charge based on the holding period:

- Within first 12 months: 6%
- Within 13-24 months: 5%
- Within 25-36 months: 4%
- Within 37-48 months: 3%
- Within 49-60 months: 2%
- Within 61-72 months: 2%
- Within 73-84 months: 1%

In this case, the holding period is 38 months, so the sales charge is 4%.

Sales charge = $4,367.28 * 4% = $174.69

Finally, we can calculate the redemption value:
Redemption value = $4,367.28 - $174.69 = $4,192.59

Therefore, the answer is B, $4,233.23, which is the closest amount presented.

You Invested $4,500 in a Mutual Fund 38 Months Ago