A Rational Model of the Closed-End Fund Discount

Preprint OPEN
Jonathan Berk; Richard Stanton;
(2004)
  • Subject:
    • jel: jel:G14

The discount on closed-end funds is widely accepted as proof of investor irrationality. We show,however, that a parsimonious rational model can generate a discount that exhibits many of the characteristics observed in practice. The only required features of the model ar... View more
  • References (17)
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