Q61
If NAV > market price of a fund, then the fund ________
A.
is selling at a discount
AnswerB.
is selling at a premium
C.
is an index fund
D.
is an exchange traded fund
Answer: Option A
Solution
Answer: Option A
Solution:
If the fund is traded at a price lower than the NAV, it is called “discount”. Similarly if the fund is traded at a price higher than the NAV it is called “premium”.