Why might the price of a share of a closed-end fund diverge from its NAV?
What will be an ideal response?
Unlike open-end bond funds, the NAV for a closed-end bond fund is determined by supply and demand in the market where the fund shares are traded and the transaction requires the payment of a brokerage commission. Because the fund's price is determined by the market, the price can differ from the NAV. If a fund's price is above the NAV, it is said to "trade at a premium," whereas a share trading below the NAV is said to "trade at a discount."
Numerous studies have sought to explain why there can be a significant divergence between a closed-end fund's market price and its NAV. Research provides several factors that cause this discrepancy between market price and NAV. The factors are those that impact supply and demand and include: current yield on stock price/NAV (relative to other closed-end funds/investmentproducts); current discount/premium; dividend cuts/increases; fund performance (relative to other closed-end funds/investment products); performance of the closed-end fund's sector (relative to other closed-end funds/investment products); investor sentiment; market outlook; sector outlook; and, availability of comparable products.
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A. company newsletter B. telephone C. videoconference D. memo E. e-mail
While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company. Sonic recorded the receipt as $729 and the correct amount of the check was $279 . What reconciling adjustment is required?
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Which of the following occurs when the respondent is assured that neither the respondent's name nor any identifying designation will be associated with his or her responses?
A) Confidentiality B) Exclusivity C) Anonymity D) Secrecy E) A promise
Using only the information provided in the following worksheet, what is the correct formula to calculate the total cash flows from financing in B5?
a) =(B2-C2)-(B4+(B3-C3))
b) =(B2-C2)+(B4-(B3-C3))
c) =(B3-C3)-(B4-(B2-C2))
d) =(B2-C2)-(B4-(B3-C3))
e) =(B2+C2)-(B4+(B3+C3))