One year ago, Big Deal Closed-End Fund had a NAV of $10.24 and was selling at a(n) 19% discount. Today, its NAV is
-
answerhappygod
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am
One year ago, Big Deal Closed-End Fund had a NAV of $10.24 and was selling at a(n) 19% discount. Today, its NAV is
One year ago, Big Deal Closed-End Fund had a NAV of$10.24 and was selling at a(n) 19% discount. Today,its NAV is $11.63 and it is priced at a(n) 7% premium. Duringthe year, Big Deal paid dividends of $0.36 and had a capitalgains distribution of $0.94. On the basis of theabove information, calculate each of the following. a.Big Deal's NAV-based holding period return for the year. b.Big Deal's market-based holding period return for the year.Did the market premium/discount hurt or add value tothe investor's return? Explain. c. Repeatthe market-based holding period return calculation,except this time assume the fund started the year at a(n) 19%premium and ended it at a(n)7% discount. (Assume thebeginning and ending NAVs remain at $10.24 and $11.63,respectively.) Is there any change in this measureof return? Why?