Paf is an emerging country with severe foreign investment restrictions but with an active stock market open mostly to local investors. The exchange rate of the pif, the local currency, with the U.S. dollar remains fixed at 1 pif/$. A closed-end country fund, called Pafy Country Fund, has been approved by Paf. Its net asset value per share is $100. It trades in New York with a premium of 20% at $120. Pafy Country Fund holds a well-diversified portfolio of Paf stocks and you expect the value of the portfolio of Paf stocks held by the closed-end fund to closely track the local stock market index. A few weeks later the Paf stock market has gone up by 10%. Media coverage has attracted attention to the potential of the Paf economy, and the demand of Pafy Country Fund by U.S. investors, especially pension funds, has been increasing; the premium has risen to 30%. Taking account of all these information, which statements is true?