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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.

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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
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