Mutual Funds
An investor places a mutual fund purchase order at 2:00 PM Eastern. At what price will the purchase be executed?
Order before 4 PM = today's NAV. Order after 4 PM = tomorrow's NAV.
Complete Analysis & Legal Rationale
Under forward pricing rules, mutual fund orders placed before 4:00 PM Eastern are executed at that day's closing NAV (calculated at 4:00 PM). Orders after 4:00 PM get the next day's NAV.
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:
Using yesterday's NAV would allow market timing.
NAV is calculated once daily at 4:00 PM, not throughout the day.
Matches the verified teaching point in the explanation.
Orders before 4:00 PM receive same-day pricing.
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.