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The Net Asset Value of Shares in a Closed-End Investment

question 35

Essay

The net asset value of shares in a closed-end investment company is $36.An investor buys the shares for $34 in the secondary market.The company distributes $1,and after one year,the net asset rises to $42.The investor sells the shares for $44 in the secondary market.
a.What is the discount?

b.What is the percentage return on the investment?


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