Assume that Investor A buys some open-end shares at 109%  of asset value, and Investor B buys closed-end shares at 85% thereof, plus 1½% commission. Both sets of shares earn and pay 30% of this asset value in, say, four years, and end up with the same value as at the beginning. Investor A redeems his shares at 100% of value, losing the 9% premium he paid. His overall return for the period is 30% less 9% or 21% on asset value. This, in turn, is 19% on his investment. How much must Investor B realize on his closed-end shares to obtain the same return on his investment as Investor A? The answer is 73% or a discount of 27% from asset value. In other words, the closed-end man could suffer a widening of 12 points in the market discount (about double) before his return would get down to that of the open-end investor.

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