Closed-end Fund Discounts and Interest Rates: Positive Covariance in US Data after 1985

Sean Flynn

No 73, Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics

Abstract: Previous papers find no relationship between interest rates and the discounts of US closed-end funds before 1985. This is taken as evidence against management fees being a cause of discounts because a negative relationship is expected: if interest rates rise, you would expect to see discounts fall as the present value of future fees is reduced. But from 1985 forward, there has been a strong positive relationship between interest rates and discounts. This supports an alternative view in which the discount varies positively with interest rates because bond yields are an alternative return against which closed-end funds must compete.

Date: 2005-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://irving.vassar.edu/VCEWP/VCEWP73.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://irving.vassar.edu/VCEWP/VCEWP73.pdf [302 Redirect]--> http://economics.vassar.edu/VCEWP/VCEWP73.pdf [301 Moved Permanently]--> https://www.vassar.edu/economics/VCEWP/VCEWP73.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vas:papers:73

Access Statistics for this paper

More papers in Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sean Flynn (flynn@vassar.edu this e-mail address is bad, please contact repec@repec.org).