A closed-end fund has total assets of $390 million and liabilities of $210,000.

Q: A closed-end fund has total assets of $390 million and liabilities of $210,000.

a. Net assets value = (Total assets – Liabilities)/Number of shares outstanding = ($390,000,000 - $210,000)/2,100,000 shares = $18.56 b. Current selling price = $17.50 Discount percentage = ($18.56 - $17.50)/$18.56 = 5.71% or, Premium percentage = -5.71%

ID: 2729461 • Letter: A

Question

A closed-end fund has total assets of $390 million and liabilities of $210,000. Currently, 21 million shares are outstanding. What is the NAV of the fund? If the shares currently sell for $17.5, what is the premium or discount on the fund? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round the NAV to 2 decimal places. Enter the premium or discount as a percent rounded to 2 decimal places. Omit the "$" & "%" signs in your response.)

Net asset value $ Premium or discount %

Explanation / Answer

Net assets value = (Total assets – Liabilities)/Number of shares outstanding = ($390,000,000 - $210,000)/2,100,000 shares = $18.56

Current selling price = $17.50

Discount percentage = ($18.56 - $17.50)/$18.56 = 5.71%

or, Premium percentage = -5.71%

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A closed-end fund has total assets of $390 million and liabilities of $210,000.

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