Question: You are considering the purchase of shares in a closed end
You are considering the purchase of shares in a closed-end mutual fund. The NAV is equal to $22.50 and the latest close is $20.00. Is this fund trading at a premium or a discount? How big is the premium or discount?
Answer to relevant QuestionsYou 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 ...Distinguish between the types of dividend distributions that mutual funds make. Are these dividends the only source of return for a mutual fund investor? Explain. Why is Jensen's measure (alpha) generally preferred over the measures of Sharpe and Treynor for assessing portfolio performance? Explain. What is asset allocation? How does it differ from diversification? What role does asset allocation play in constructing an investment portfolio? Your portfolio has a beta equal to 1.3. It returned 12% last year. The market returned 10%; the risk-free rate is 6%. Calculate Treynor’s measure for your portfolio and the market. Did you earn a better return than the ...
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