The price an investor will pay today when purchasing an open-end investment company is determined from:

• A. Yesterday's closing price.
• B. Today's closing price.
• C. The average closing price for the week.
• D. The price at the time the order is entered

Answer: (B)

Open-end funds are bought at the fund’s net asset value (NAV), which is calculated once at the end of the trading day. When you place a buy order, you don’t pay an intraday price; your order is filled at the closing NAV for that day. That closing NAV reflects the fund’s assets minus liabilities as of the end of the day, so the price you pay today is based on today’s closing price. Intraday prices or averages don’t determine mutual fund purchase prices.