In the absence of any load charges, open-end mutual funds are priced at (or very close to) their net asset values, whereas closed-end funds rarely trade at their NAVs. Explain why one type of fund would normally trade at its NAV while the other type (CEFs) usually does not. What are price premiums and discounts and in what segment of the mutual fund market will you usually find them? Look online at WSJ.com or another source and find 5 funds that trade at a discount and 5 funds that trade at a premium. List all 10 of them, including the sizes of their respective discounts and premiums. What’s the biggest price discount you could find? How about the biggest price premium? What would cause a fund to trade at a discount? At a premium?
Answer to relevant QuestionsA year ago, an investor bought 200 shares of a mutual fund at $8.50 per share. Over the past year, the fund has paid dividends of $0.90 per share and had a capital gains distribution of $0.75 per share. a. Find the ...You purchased 1,000 shares of MutualMagic 1 year ago for $20.00 per share. During the year, you received $2.00 in dividends, half of which was from dividends on stock the fund held and half of which was from interest earned ...What is a problem investment? What questions should one consider when analyzing each investment in a portfolio? Explain the role that formula plans can play in the timing of security transactions. Describe the logic underlying the use of these plans. What role does current market information play in analyzing investment returns? How do changes in economic and market activity affect investment returns? Explain.
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