Question: You are evaluating a closed-end mutual fund and see that its price is different from its net asset value (NAV). The fund has an expense

You are evaluating a closed-end mutual fund and see that its price is different from its net asset value (NAV).

 The fund has an expense ratio (ε) of 3.66% and a dividend yield (δ) of 4.00%. The fund has experienced an abnormal risk-adjusted return (α) of 3.62%.

What amount (premium or discount) is the fund likely to trade relative to its NAV?

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