ABC fund has a 4.5% front-end sales load and a net asset value of $40. You plan to invest $16,000. How many more shares would you have received if the fund did not have a sales load?

To understand this question, it's important to first recognize what a front-end sales load means in the context of mutual funds. A front-end sales load is a commission paid when you purchase shares in a mutual fund, and this cost reduces the amount of your investment that is applied towards buying shares.

In this scenario, the ABC fund has a 4.5% sales load on your investment of $16,000. To find out how much of your investment will actually be used to purchase shares, you need to subtract the sales load from the total investment.

First, calculate the total sales load:

Sales load = Investment amount × Sales load percentage Sales load = $16,000 × 0.045 = $720

Now, determine the amount that will be used to purchase shares after the sales load is subtracted:

Amount available to purchase shares = Investment amount - Sales load Amount available = $16,000 - $720 = $15,280

Next, find out how many shares you can buy with the net asset value (NAV) of $40:

Number of shares with sales load = Amount available / NAV Number of shares with sales load = $15,280 / $40 = 382 shares

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