A Closed-End Fund Has Total Assets of $379 Million and Liabilities

question 16

Multiple Choice

A closed-end fund has total assets of $379 million and liabilities of $640,000.There are 36 million shares outstanding.What is the premium or discount if the shares are currently selling for $9.85 each?

• A) 7.46 percent discount
• B) 6.28 percent discount
• C) 6.94 percent discount
• D) 6.80 percent premium
• E) 7.46 percent premium

---

Definitions:

Underpricing

The practice of listing a company's stock at a lower price than its market value during its IPO, typically to ensure the stock is fully subscribed.

Indirect Flotation Cost

Expenses indirectly incurred by a company when raising new capital, such as underpricing or the costs associated with time and effort.

Filing Fees

Charges required to file documents with a governmental body or court, often mandatory for legal processes, registrations, or applications.