Is Penny Trading Optimal for Closed-End Funds in China

Abstract

The research is conducted when the first author was an Assistant Professor of Finance at Iowa State University and a Senior Visiting Financial Economist at the Shanghai Stock Exchange. The first author is grateful to the support and the generous funding from the Shanghai Stock Exchange. In particular, the authors thank Xinghai Fang, Ruyin Hu, Di Liu, Hao Fu, Zhanfeng Chen, Danian Sidu, and Xiaonan Lu for their helpful comments and research support. The comments and point of views expressed in the paper, however, are the authors own, and do not necessarily reflect the opinions of the New York Stock Exchange and the Shanghai Stock Exchange. Therefore, the authors are responsible for all remaining errors.