If a Closed-End Investment Company Sells for a Discount

question 2

Multiple Choice

If a closed-end investment company sells for a discount,

• A)its price exceeds the net asset value
• B)its price is less than the net asset value
• C)dividend income exceeds capital gains
• D)capital gains exceed dividend income.

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Definitions:

Financial System

An intricate network of financial institutions, markets, and instruments that facilitate the exchange of funds and allocation of resources in an economy.

Business Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns, typically into companies or projects.

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutional investors which must be repaid at a later date.

Equity Financing

The process of raising capital through the sale of shares in a company.