21. Closed-End Fund Discounts (LO2, CFA3) Suppose you purchase 5,000 shares of a closed-end mutual fund at

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21. Closed-End Fund Discounts (LO2, CFA3) Suppose you purchase 5,000 shares of a closed-end mutual fund at its initial public offering; the offer price is $10 per share. The offering prospectus discloses that the fund promoter gets an 8 percent fee from the offering. If this fund sells at a 7 percent discount to NAV the day after the initial public offering, what is the value of your investment?

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Muhammad Salman Alvi

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