INVESTMENTS (LOOSELEAF) W/CONNECT
11th Edition
ISBN: 9781260465945
Author: Bodie
Publisher: MCG
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Question
Chapter 4, Problem 11PS
Summary Introduction
(A)
Adequate information:
Value of portfolio - $ 200 million
Liabilities - $ 3 million
Number of share outstanding- 5 million
To compute:
Net asset value for the given fund
Introduction:
Net asset value of the fund is the value of the portfolio owned by the fund on a particular date netted off all the liabilities to the outsiders.
Summary Introduction
(B)
Adequate information:
NAV of the fund - $ 39.4 per share
Current selling price of the fund- $ 36 per share
To compute:
Premium of discount as a percentage of NAV
Introduction:
If the fund is selling at a price above its NAV then we will say that fund is selling at premium, while if the fund is selling at a price below its NAV then we will say that fund is selling at discount.
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The Closed Fund is a closed-end investment company with a portfolio currently worth $200 million. It has liabilities of $3 million and 5 million shares outstanding.a. What is the NAV of the fund?b. If the fund sells for $36 per share, what is its premium or discount as a percent of net asset value?
The Closed Fund is a closed-end investment company with a portfolio currently worth $245 million. It has liabilities of $12 million and 17 million shares outstanding.
a. What is the NAV of the fund? (Round your answer to 2 decimal places.)
b. If the fund sells for $10 per share, what is its premium or discount as a percent of net asset value? (Input the amount as a positive value. Round your answer to 2 decimal places.)
The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $450 million. It has liabilities of $4 million and 8 million shares outstanding. If the fund sells for $53 a share, what is its premium or discount as a percent of NAV?
Multiple Choice
Chapter 4 Solutions
INVESTMENTS (LOOSELEAF) W/CONNECT
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