Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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How long does a mutual fund have to redeem shares at the next calculated NAV after a redemption request?

3 days
5 days
7 days
10 days

The correct answer is: 7 days

A mutual fund is required to redeem shares at the next calculated net asset value (NAV) after a redemption request is received, which typically must be processed within seven days. This rule is established to ensure that investors can liquidate their holdings in a timely manner, providing liquidity and supporting the overall trust in mutual fund operations. The seven-day timeframe allows the fund sufficient time to collect transaction information and compute the accurate NAV, ensuring that investors receive a fair price based on the current market conditions at the time of redemption.