The fund has 49,000 shares and liabilities of $124,000. Assume the fund is sold with a front-end load of 2.5 percent. What is the offering price of the fund

$49.81

Explanation:

The offering price is calculated as:

= NAV per share / (100 - front-end load)

NAV per share = (Value - liabilities) / Number of shares

= [ ( 12,000 * 86) + (32,000 * 15) + (3,500 * 69) + (75,000 * 10) - 124,000] / 49,000 mutual fund shares

= 2,379,500 / 49,000

= $48.56

Offering price = 48.56 / (100 - 2.5%)

= $49.81

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