One year ago, Big Deal Closed-End Fund had a NAV of  $10.28  and was selling at a(n)  16%  discount. Today, its NAV is  $11.58  and it is priced at a(n)  4%  premium. During the year, Big Deal paid dividends of  $0.33  and had a capital gains distribution of  $0.91. 

On the basis of the above information, calculate each of the following.

a. Big Deal's NAV-based holding period return for the year.

b. Big Deal's market-based holding period return for the year. Did the market premium/discount hurt or add value to the investor's return? Explain.

c. Repeat the market-based holding period return calculation, except this time assume the fund started the year at a(n)  16%  premium and ended it at a(n)  4%  discount. 

(Assume the beginning and ending NAVs remain at  $10.28  and  $11.58,  respectively.) Is there any change in this measure of return? Why?

Answer rating: 100% (QA)

a Big Deals NAVbased holding period return for the year is 1158 b ... View the full answer