# Question: Closed end funds sell shares in a fixed basket portfolio of

Closed-end funds sell shares in a fixed basket (portfolio) of securities (as distinguished from ordinary mutual funds, which continuously buy and sell shares of securities). Consider the net asset value and the market price for Sector Equity Funds, as shown in Table 11.3.3. While you might expect each fund to sell (the market price) at the same price as the sum of its components (the net asset value), there is usually some discrepancy.

a. How strong is the relationship between the net asset value and the market price for these closed-end funds?

b. Are the net asset value and the market price significantly related, or is it as though the market prices were randomly assigned to funds? How do you know?

c. Find the least-squares line to predict market price from net asset value.

d. Does the slope of the least-squares line differ significantly from 1? Interpret your answer in terms of this question: Could it be that a one-point increase in net asset value translates, on average, into a one point increase in market price?

QUESTION CONTINUE TO NEXT PAGEā¦..

a. How strong is the relationship between the net asset value and the market price for these closed-end funds?

b. Are the net asset value and the market price significantly related, or is it as though the market prices were randomly assigned to funds? How do you know?

c. Find the least-squares line to predict market price from net asset value.

d. Does the slope of the least-squares line differ significantly from 1? Interpret your answer in terms of this question: Could it be that a one-point increase in net asset value translates, on average, into a one point increase in market price?

QUESTION CONTINUE TO NEXT PAGEā¦..

**View Solution:**## Answer to relevant Questions

Consider the number of transactions and the total dollar value of merger and acquisition deals in the oil and gas industry, from Table 11.1.5. a. Find the regression equation for predicting the dollar value from the number ...Consider annual salary as the Y variable and experience as the X variable. a. Draw a scatterplot and describe the relationship. b. Find the correlation coefficient.What does it tell you? Is it appropriate, compared to the ...a. What salary would you expect for a 50-year-old individual? b. Find the 95% confidence interval for a new individual (from the same population from which the data were drawn) who is 50 years old. c. Find the 95% confidence ...a. What is interaction? b. What can be done to include interaction terms in the regression equation? a. What is the multiple regression linear model? b. List three ways in which the multiple regression linear model might fail to hold. c. What scatterplot can help you spot problems with the multiple regression linear model?Post your question