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

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Definitions:

Forward Contract

A financial contract between two parties to buy or sell an asset at a specified future time at a price agreed upon at the time of the contract.

Net Method

is an accounting method for recording purchases where the purchase is recorded at net of any trade discounts received.

Profit Test

A financial analysis conducted to determine the profitability or financial viability of a project, business, or product.

Reportable Segments

Identifiable business units within a corporation that are significantly engaging in business activities, generating revenues, and incurring expenses.