Question

1. The Money market mutual funds are generally less risky than a corporate bond mutual fund.

True

False

2. A closed-end fund has total assets of $270 million and liabilities of $640,000. There are 25

million shares outstanding. What is the premium or discount on the fund if the shares are

currently selling for $9.80 each?

a.		$10.77 premium
b.		$10.77 discount
c.		9.01% premium
d.		9.01% discount

3. A closed-end fund has total assets of $870 million and liabilities of $640 mil. There are 20

million shares outstanding. What is the premium or discount on the fund if the shares are

currently selling for $11.53 each?

a.		$11.50 premium
b.		$11.50 discount
c.		0.26% premium
d.		0.26% discount

PLEASE answer ALL and explain your answer.

THANK YOU

Answer 1

1 True because money market involves government bond and treasury bonds which are less riskier than corporate bonds.

2. Option d is correct
Total assets of $270 million and liabilities of $640,000.
Equity = Total; assets - Liabilities s= 270 - 0.64 = 269.36
Price Per share = 269.36/25 = 10.774
Discount = (9.80-10.774)/10.774 = -9.01%

3) Option c is correct option
?Total assets of $870 million and liabilities of $640 mi
Equity = Total; assets - Liabilities s= 870 - 640 = 230
Price Per share = 230/20 = 11.50
Premium = (11.53-11.50/11.50) = 0.26%

Best of Luck. God Bless