Question
A closed-end fund starts the year with a net asset value of $10. By year-end, its net asset value equals $12. At the start of
A closed-end fund starts the year with a net asset value of $10. By year-end, its net asset value equals $12. At the start of the year, the fund sells at a 5% discount to the NAV. At the end of year, the fund sells at a 2% premium. The fund paid year-end distributions of income and capital gains of $1 per share. Suppose an investor invests $10,000 at the start of the year. Please answer the following questions:
1. What is the rate of return to the investor during the year?
2. How much is the year-end balance of the investment, including year-end distributions?
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