The discount or premium on a closed-end mutual fund can be as much as 25 percent.

Question

Quizplus · Accepted Answer

Yes, the discount or premium on a closed-end mutual fund can be as much as 25 percent. This is because unlike open-end mutual funds, closed-end funds have a fixed number of shares and their price is determined by supply and demand in the market, which can lead to fluctuations in their market price. The discount or premium refers to the difference between the market price per share and the net asset value (NAV) per share. If the market price is lower than the NAV, the fund is said to be trading at a discount. If the market price is higher than the NAV, the fund is said to be trading at a premium.

The Discount or Premium on a Closed-End Mutual Fund Can