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Full-Text Articles in Business
How Informative Is Floating Nav When Securities Trade Infrequently?, Kyle D. Allen, George D. Cashman, Drew B. Winters
How Informative Is Floating Nav When Securities Trade Infrequently?, Kyle D. Allen, George D. Cashman, Drew B. Winters
Finance Faculty Research and Publications
We examine if a floating net asset value (NAV) increases the transparency of risk for investors. Using closed-income fixed income funds we find little evidence that a floating NAV helps investors better understand the value and risk of a fund when a fund's assets trade infrequently. This potentially informs the debate regarding the adoption of a floating NAV in the money market industry. Our results suggest that it is unlikely that the benefits of floating NAV will outweigh the costs.