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Q6 Melanie is considering purchasing shares in an international bond fund. She has limited her search to one open-end and one closed-end fund. Information on
Q6
Melanie is considering purchasing shares in an international bond fund. She has limited her search to one open-end and one closed-end fund. Information on the funds follows:
| Open-End | Closed-End | |||
| NAV | $14.38 | $25.37 | ||
| Sales price | no-load | $18.16 | ||
| Annual expenses | 1.43 | % | 1.14 | % |
| YTD return | 13.17 | % | 13.65 | % |
a. How much would Melanie pay per share for the open-end fund? How much would she pay per share for the closed-end fund?
b. Is the closed-end fund selling at a discount or a premium to its NAV?
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