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Open-Ending of Closed-End Funds in the CR: Price and Discount Reaction - Empirical Evidence


  • Jana Fajtová


This study focuses on the closed-end funds in the Czech Republic. Using event-study methodology and weekly data for 24 funds from July 1996 to July 2001, this paper investigates the price and discount reaction to key events associated with the open-ending of the closed-end funds. The findings reveal statistically significant reactions to the change of the institutional framework. Positive abnormal returns and a substantial decrease in discounts can be observed during the announcement of the legal change. However, there was no statistically significant reaction to public announcements of the open-ending of individual closed-end funds. Apparently, the anticipation of such announcements was incorporated in the reaction to general legal change. Finally the study gives evidence of different discounts for two particular fund groups. These results lend considerable support to the conclusion that the Czech fund market is efficient, at least in its ability to respond to new essential information.

Suggested Citation

  • Jana Fajtová, 2004. "Open-Ending of Closed-End Funds in the CR: Price and Discount Reaction - Empirical Evidence," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 54(1-2), pages 22-49, January.
  • Handle: RePEc:fau:fauart:v:54:y:2004:i:1-2:p:22-49

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    Cited by:

    1. Markovic-Hribernik Tanja & Vek Uros, 2013. "Do Mutual Fund Performance And The Abilities Of Fund Managers In Slovenia Deviate From Those In Developed Markets?," Romanian Economic Business Review, Romanian-American University, vol. 8(1), pages 130-139, March.
    2. Tanja Markovic-Hribernik & Andrej Kuzner, 2013. "Mutual Fund Management Performance In Transition Countries: Domestic Vs. Foreign Mutual Fund Managers – Research Findings For Slovenia," Romanian Economic Business Review, Romanian-American University, vol. 8(4), pages 84-105, december.

    More about this item


    open-ending of closed-end funds; closed-end funds; discount; event study;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors


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