Closed-end funds are a type of investment company that issues a fixed number of shares which trade on a secondary market, such as a stock exchange, similar to individual stocks. When an investor sells shares, the transaction is executed with another investor, not with the fund itself. The price is determined by supply and demand in the market. Therefore, the seller receives the current market bid price for the shares. As this is a brokered transaction on an exchange, a commission is charged by the brokerage firm. The net proceeds are the total sale amount (bid price multiplied by the number of shares) minus the brokerage commission.

A. Net asset value (NAV): Closed-end funds trade at market-driven prices, which can be at a premium or discount to the NAV, not directly at the NAV itself.

B. NAV less any redemption fee: This calculation applies to the sale (redemption) of open-end fund (mutual fund) shares directly with the fund company.

D. Public offering price (POP) less any redemption fee: The POP is the purchase price for an open-end fund, and this option incorrectly mixes terms for buying and selling.

1. U.S. Securities and Exchange Commission (SEC). (2013, January). Investor Bulletin: Closed-End Funds. SEC Publication. On page 1, it states, "An investor wishing to sell closed-end fund shares must sell them to another investor in the secondary market... Like stocks, closed-end fund shares trade on exchanges... When you buy or sell shares of a closed-end fund, you may pay a brokerage commission to your broker."

2. Financial Industry Regulatory Authority (FINRA). (n.d.). Fund Facts: An Introduction to Closed-End Funds. In the section "How Closed-End Funds Work," it clarifies, "Unlike open-end mutual funds, closed-end funds are not 'redeemable,' meaning that investors who want to sell their shares cannot sell them back to the fund. Instead, they must sell their shares to other investors on the secondary market... When you buy or sell shares of a closed-end fund, you will pay a brokerage commission to your broker."

3. Bodie, Z., Kane, A., & Marcus, A. J. (2018). Investments (11th ed.). McGraw-Hill Education. In Chapter 4, "Mutual Funds and Other Investment Companies," Section 4.2 discusses that closed-end funds "are traded on organized exchanges and can be purchased through brokers just like other common stock; their prices, therefore, can differ from NAV." This confirms the trading mechanism involves brokers (and thus commissions) and market prices (bid/ask).