Matt owns 724.08 shares of a fund which has a current NAV of $41.04. He has owned all these shares for 3.3 years. The fund charges a contingent deferred sales charge which starts at 5% for the first year and declines by 1% each year thereafter. How much cash will he receive if he redeems all of his shares today?

Question

Quizplus · Accepted Answer

The correct answer is A because the cash received is $29,121.92. The NAV is $41.04, and the number of shares is 724.08. The total value of the shares is $41.04 * 724.08 = $29,709.36. The contingent deferred sales charge is 5% for the first year, 4% for the second year, and 3% for the third year. The total sales charge is 5% + 4% + 3% = 12%. The cash received is $29,709.36 * (1 - 12%) = $29,121.92.

Matt Owns 724