either i am wrong or the quiz master is dumb- plz be alert

arvindanallen
Posts: 5
Joined: Sat Jul 28, 2012 10:23 am

either i am wrong or the quiz master is dumb- plz be alert

Postby arvindanallen » Thu Aug 09, 2012 1:23 am

i checked it in schwezer....and the answer to the question is that close ended funds always or atleast mostly trade premium to their nav's....i dont know who creates these quiz's but i am seriously taken back by the quality.....plz guys be carefull



Closed-end funds are generally traded at
Choose one answer.
a. Discount to their NAVs
b. Premium to their NAV’s
c. At par to their NAV’s
The correct answer is Discount to their NAVs.
Incorrect
Marks for this submission: 0/1.

pankaj
Finance Junkie
Posts: 61
Joined: Fri Aug 03, 2012 11:24 am

Re: either i am wrong or the quiz master is dumb- plz be ale

Postby pankaj » Fri Aug 10, 2012 11:07 am

Generally shares of close-end fund are initially issued at a small premium to their par value, this premium serve as compensation for issuers issuance cost. However, once the close-end fund shares begins to trade,their price is determined by supply and demand in the secondary market. Therefore, the shares of close-end fund may trade at a premium or discount to the actual NAV.

Whatsoever, i completely agree the question given in the quiz is wrong, It is not structured properly. We will try to fix the problem as soon as possible.


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