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

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Prepare for the Investment Company and Variable Contracts Products Principals Exam with our interactive quiz. Master key concepts with multiple choice questions designed to enhance your understanding and boost your confidence for the Series 26.

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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.