The Closed Fund has a net asset value of $36.14 per share. If the fund sells...

The Closed Fund has a net asset value of $36.14 per share. If the fund sells for $34.44 per share, what is its premium or discount as a percent of net asset value?

Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.

Solutions

Expert Solution

The current price of a share is $34.44 which is lesser than the NAV i.e. $36.14. So the fund is trading at a discounted value. The discounted value as a percentage of net asset value can be calculated by the discount amount on NAV.

The discounted value is = (NAV - Current Price per shar)/NAV = (36.14-34.44)/36.14 = 0.0470 or 4.70%

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

An open-end fund has a net asset value of $8.09 per share. It is sold with...

An open-end fund has a net asset value of $8.09 per share. It is sold with a front-end load of 4%. What is the selling price? Round your answer to the nearest cent (2 decimal places).

A hedge fund with net asset value of $48 per share currently has a high water...

A hedge fund with net asset value of $48 per share currently has a high water mark of $51. Suppose it is January 1, the standard deviation of the fund’s annual returns is 45%, and the risk-free rate is 5%. The fund has an incentive fee of 20%, but its current high water mark is $51, and net asset value is $48. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

A hedge fund with net asset value of $56 per share currently has a high water...

A hedge fund with net asset value of $56 per share currently has a high water mark of $58. Suppose it is January 1, the standard deviation of the fund’s annual returns is 30%, and the risk-free rate is 4%. The fund has an incentive fee of 20%, but its current high water mark is $58, and net asset value is $56. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

A hedge fund with net asset value of $52 per share currently has a high water...

A hedge fund with net asset value of $52 per share currently has a high water mark of $56. Suppose it is January 1, the standard deviation of the fund’s annual returns is 50%, and the risk-free rate is 3%. The fund has an incentive fee of 20%, but its current high water mark is $56, and net asset value is $52. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

A hedge fund with net asset value of $43 per share currently has a high water...

A hedge fund with net asset value of $43 per share currently has a high water mark of $44. Suppose it is January 1, the standard deviation of the fund’s annual returns is 30%, and the risk-free rate is 2%. The fund has an incentive fee of 20%, but its current high water mark is $44, and net asset value is $43. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

A hedge fund with net asset value of $70 per share currently has a high water...

A hedge fund with net asset value of $70 per share currently has a high water mark of $73. Suppose it is January 1, the standard deviation of the fund’s annual returns is 40%, and the risk-free rate is 4%. The fund has an incentive fee of 20%, but its current high water mark is $73, and net asset value is $70. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

A hedge fund with net asset value of $66 per share currently has a high water...

A hedge fund with net asset value of $66 per share currently has a high water mark of $68. Suppose it is January 1, the standard deviation of the fund’s annual returns is 55%, and the risk-free rate is 3%. The fund has an incentive fee of 20%, but its current high water mark is $68, and net asset value is $66. a. What is the value of the annual incentive fee according to the Black-Scholes formula? (Do not round...

An open-end mutual fund has the following assets. Please calculate Net Asset Value per share and...

An open-end mutual fund has the following assets. Please calculate Net Asset Value per share and total cost of buying one share of the mutual fund. Stock Shares Price A 2,000,000 $45.00 B 2,000,000 $78.00 C 2,000,000 $13.00 D 2,000,000 $26.00 Item Value front-end load $10 per share back-end load $5 per share current mutual fund shares 2,000,000 management fees 0.15% per month What is the NAV? What is Total Purchasing Cost Per Fund share?

An open-end mutual fund has the following assets. Please calculate Net Asset Value per share and...

A closed-end fund starts the year with a net asset value of $21 . by year-end...

A closed-end fund starts the year with a net asset value of $21 . by year-end , NAV equals $20.5 . At the beginning of the year , the fund is selling at a 3% premium to NAV. By the end of the year, the fund is selling at a 4% discount to NAV . the fund paid year-end distributions of income and capital gains of 2.50$ . what is the rate of return to an investor in the fund...

Subjects