Mutual Funds
An investor redeems 1,000 shares of a mutual fund at a NAV of $25.00. If the fund has a 1.5% redemption fee, what is the net proceeds?
Redemption fee reduces proceeds: Shares x NAV - (Shares x NAV x fee %).
Complete Analysis & Legal Rationale
Gross redemption = 1,000 shares x $25.00 = $25,000. Redemption fee = $25,000 x 1.5% = $375. Net proceeds = $25,000 - $375 = $24,625.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Matches the verified teaching point in the explanation.
$25,000 is the gross amount before the redemption fee.
This incorrectly adds instead of subtracting the fee.
This amount is not supported by the calculation.
Official Standard: Regulatory framework for investment companies including mutual funds (verify current text).
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.