Question

the forward pricing rule applies to a) purchases, but not redemptions, of the shares of open-end investment companies. b) purchases and redemptions of the shares of closed-end investment companies. c) purchases and redemptions of the shares of open-end investment companies.

Answer 1

The forward pricing rule applies to: c) purchases and redemptions of the shares of open-end investment companies.

What is SEC?

SEC is an abbreviation for Securities and Exchange Commission and it can be defined as a governmental agency that is saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in the United States of America.

In the U.S, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America.

What is the forward pricing rule?

The forward pricing rule can be defined as a SEC-mandated policy for all public institutions which requires processing buy and sell orders for mutual-fund shares of open-ended investment companies, at the net asset value (NAV).

In this context, we can reasonably infer and logically deduce that the forward pricing rule applies to purchases and redemptions of the shares of open-end investment companies.

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