A Closed-End Fund with an NAV of $10

question 108

True/False

A closed-end fund with an NAV of $10.25 and a market price of $8.20 is selling at a discount of 20%.

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Definitions:

Principal

The original sum of money borrowed in a loan, or the amount of the loan that has yet to be repaid, excluding interest.

Annual Payments

Regular payments made yearly, often referring to the interest or dividends paid by bonds or stocks.

Compounded Annually

This term refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods, with the compounding occurring once per year.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term to lease a similar asset in a similar economic environment.