THE VALUATION OF CLOSED-END INVESTMENT-COMPANY SHARES

摘要: The pricing of shares closed-end investment companies appears to provide a startling counter-example the general rule. These invest in portfolio stocks and other securities just as do open-end mutual funds. Unlike funds, however, neither issue new nor redeem outstanding ones. Investors who wish purchase or sell must so on open market at prices reflecting not net asset values but rather supply demand for shares. Therein lies seeming inconsistency with efficient-markets hypothesis. usually discounts, sometimes substantial from actual portfolios they hold. This paper attempts develop some theoretical principles concerning valuation companies. Then, cross-sectional empirical estimates will be presented showing relationship between fund discounts (or premiums) factors isolated analysis. Finally, behavior over time examined time-series analysis average conducted. I conclude that while structure can partially explained basis principles, size is far larger than warranted. does then seem an illustration imperfection capital-asset pricing.