FINRA Securities Industry Essentials Exam (SIE) SIE Question # 63 Topic 7 Discussion
SIE Exam Topic 7 Question 63 Discussion:
Question #: 63
Topic #: 7
A retail investor owns shares of Mutual Fund ABC that paid a $0.25 dividend on September 1 and closed at $10.00. What is the opening price once this fund trades on the ex-dividend date?
Ex-Dividend Date Pricing: On the ex-dividend date, the mutual fund's price is adjusted downward by the amount of the dividend.
Closing Price: $10.00
Dividend: $0.25
Adjusted Opening Price: $10.00 - $0.25 = $9.75.
Incorrect Options:
A: $9.25 subtracts more than the dividend amount.
C: $10.00 does not reflect the dividend adjustment.
D: $10.25 adds to the price rather than subtracting the dividend.
SEC Guidance on Mutual Fund Pricing: SEC Mutual Funds.
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