One year ago, Super Star Closed End Fund had a NAV of $10.23 and was selling at a 16% discount. Today, its NAV is $11.67 and it is priced at a 7% premium. During the year, Super Star paid dividends of $0.49 and had a capital gains distribution of $0.93. On the basis of the above information, calculate each of the following:
a. Super Stars NAV-based holding period return for the year.
b. Super Stars market based holding period return for the year. Did the market premium/discount hurt or add value to the investors return? Explain
c. Repeat the market-based holding period return calculation, except this time assume the fund started the year at a 16% premium and ended it a a 7% discount. (Assume the beginning and ending NAVs remain at $10.23 and $11.67, respectively). Is there any change in this measure of return? Why?
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