Question

Orders placed for buying shares of a mutual fund any time up to 4:00 p.m. are priced at that day’s net asset value (NAV), and orders placed after 4:01 p.m. are priced at the next day’s NAV. What is this practice known as? a. Price arbitrage b. Forward pricing c. Late trading d. Price dealing

Answer 1

Answer:

Option "b" is the correct answer to the following question.

Explanation:

This is the agreed price of the relevant material, commodity or tangible asset as negotiated by the consumer and the forward agreement dealer, to be payable in the future event at a fixed date.

In this situation, Before 4:00 P.M is the present price of mutual fund and after 4:00 P.M is the future price of the mutual fund.