- 32 -
end the fund.”15 That screening process produced a sample of 14
funds.
Dr. Bajaj derives his sample of closed end equity funds from
the list of “general equity” funds set forth in the January 12,
1996 edition of the Wall Street Journal. For reasons not
entirely clear, Dr. Bajaj excludes two of those funds from
consideration, leaving a sample of 20 funds.16
Dr. Bajaj’s sample contains nine funds that Mr. Frazier
excludes from his sample. With regard to the first two of Mr.
Frazier’s three screening criteria, Dr. Bajaj states in his
rebuttal testimony that none of those nine funds was a special
purpose fund and that none had a stated maturity date. With
regard to Mr. Frazier’s third screening criterion, Dr. Bajaj
states that the fact that a fund’s shareholders can vote to open-
end the fund does not mean that such a conversion is imminent.
Dr. Bajaj also states that the summary descriptions (contained in
Mr. Frazier’s direct testimony) of five of the funds included by
15 As noted earlier, a shareholder of an open-end fund
generally can obtain the liquidation value of his investment
(i.e., his pro rata share of the fund’s NAV) by tendering his
shares to the fund for repurchase. It stands to reason that, to
the extent the conversion of a closed end fund to open-end status
is imminent, the share price of such fund will tend to approach
the fund’s NAV per share.
16 In his direct testimony, Dr. Bajaj states that the two
excluded funds “could not be identified in Morningstar Principia
dataset as of December 31, 1996". Since Mr. Frazier excludes
those funds from his sample as well, we similarly exclude them
from consideration.
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