NAV and Market Price Relationship in Closed-End Funds

The Relationship between NAV and Market Price of Closed-End Funds

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Question

The NAV of a closed end fund _______ the market price of the fund.

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Explanations

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A. B. C. D.

Explanation

Historically, the market price of a closed end fund has been 5 to 20 percent below the NAV of the fund. Closed end funds also can and do at times trade at a premium. Therefore the NAV can be less than, equal to, or greater than the market price.