Ch.7 · Total Expense Ratio Limits · medium
What is the NAV-based pricing advantage of mutual funds over stock trading?
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EXPLANATION
NAV-based pricing in open-ended mutual funds means all investors who transact on the same business day (before the cut-off time) receive the same price — that day's closing NAV. This eliminates intraday price volatility and ensures no investor can exploit intraday price movements at others' expense. This equal-pricing mechanism is a fundamental investor protection feature of mutual funds.
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