A closed-end fund has total assets of $379 million and liabilities of $640,000. There are 36 million shares outstanding. What is the premium or discount if the shares are currently selling for $9.80 each?

Question

Quizplus · Accepted Answer

The net asset value (NAV) per share is calculated as (Total Assets - Liabilities) / Shares Outstanding = ($379,000,000 - $640,000) / 36,000,000 = $10.50. The discount is calculated as (NAV - Market Price) / NAV = ($10.50 - $9.80) / $10.50 = 6.76% discount.

A Closed-End Fund Has Total Assets of $379 Million and Liabilities