A closed-end fund starts the year with a net asset value of $20. By year-end, NAV equals $20.90. At the beginning of the year, the fund is selling at a 4% premium to NAV. By the end of the year, the fund is selling at a 9% discount to NAV. The fund paid year-end distributions of income and capital gains of $2.30.

a. What is the rate of return to an investor in the fund during the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Rate of return             %

b. What would have been the rate of return to an investor who held the same securities as the fund manager during the year? (Round your answer to 2 decimal places.)

Rate of return             %

Answer rating: 100% (QA)

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