FINRA General Securities Representative SIE Question # 44 Topic 5 Discussion
SIE Exam Topic 5 Question 44 Discussion:
Question #: 44
Topic #: 5
A registered representative (RR) receives a mutual fund order from a customer at 4:10 p.m. ET. Which of the following statements is true regarding this order?
A.
It must be executed at the next closing price.
B.
It must be executed at the next day’s opening price.
C.
It must be accepted as an "as/of" trade for today's price.
D.
It is not permitted to be accepted as it was received after the market close.
Mutual funds are traded based on forward pricing. Orders received after the market closes are executed at the NAV calculated at the next market close.
A is correctbecause it aligns with forward pricing rules.
B,C, andDare incorrect as they do not follow mutual fund trade practices.
[Reference:Investment Company Act of 1940, Section 22, , ]
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