The Druid Fund has a NAV of $9.00 and an offer price of $9.45.We know,then,that
A)Druid is a load fund.
B)Druid is about to be issued to the public as a no-load fund with a $0.45 offer cost.
C)shares can be purchased only through a stockbroker.
D)there is a $0.45 premium paid to investors to buy the shares.

Question

Quizplus · Accepted Answer

The fact that Druid has an offer price higher than its NAV indicates that it is a load fund. Load funds charge a sales commission, which is added to the NAV to determine the offer price. In this case, the load is $0.45, which is added to the NAV of $9.00 to arrive at an offer price of $9.45.

The Druid Fund Has a NAV of $9