Question of the Week

Which of the following terms are associated with the purchase/redemption of open-end investment company shares?

a) 90-day backdating
b) Forward pricing
c) At the money
d) Current business day close

Answer:

The correct answer is b.

Forward pricing is the SEC Rule that requires all transactions in open-end investment company shares to be based on the next calculation of the fund’s Net Asset Value (NAV).