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Rate of Return in Investment

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If an investor buys shares in a closed-end investment company for $46 and the net asset value is $53, what is the discount? If the company distributes $1, the net asset value rises to $58, and the investor sells the shares for a premium of 5 percent over the net asset value, what is the percentage earned on the investment?

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Solution Summary

Given the purchase price, net asset value, and distribution and proceeds of an investment in a closed-end investment company, this solution illustrates how to determine the discount on purchase and return on investment on sale.

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