Recent studies provide evidence that investors participating in the financial markets, decide for their actions using heuristics, according to their feelings and reacting to noise. In this paper, we extract two factors related to the variability of Premium/Discount (P/D): a behavioral and a fundamental. In our opinion Closed-End Funds represent a market where investor sentiment is one key reason for its existence. It seems that the structure of the closed end funds call for the existence of a discount.
