Multiple Choice QuestionWhat is a benefit of an exchange-traded fund?Multiple choice question.similar to checking accounthighest available interest ratelow management feesminimum $50,000 investment
Question
Multiple Choice QuestionWhat is a benefit of an exchange-traded fund?Multiple choice question.similar to checking accounthighest available interest ratelow management feesminimum $50,000 investment
Solution
The correct answer is "low management fees".
Exchange-Traded Funds (ETFs) are known for their low management fees. This is because they are designed to track an index rather than actively manage investments, which reduces the amount of management required. This is in contrast to mutual funds, which often have higher fees due to more active management.
The other options are incorrect. ETFs are not similar to checking accounts, they do not necessarily offer the highest available interest rate, and they do not require a minimum $50,000 investment.
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Multiple Choice QuestionMost open-end funds provide their investors with the ability to change shares in one fund to another fund within the same Blank______.Multiple choice question.investment objectivestock exchangefamilymarket
An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks. Consider an ETF for which each share represents a portfolio of two shares of International Business Machines (IBM), three shares of Merck (MRK), and three shares of Citigroup Inc. (C). Suppose the current market price of each individual stock are shown below: Stock Current Price IBM $128.92 MRK $71.75 C $64.62 Suppose that the ETF is trading for $666.95; you should: a. buy the EFT and sell 2 shares of IBM, 3 shares of MRK, and 3 shares of C. b. sell the EFT and buy 3 shares of IBM, 2 shares of MRK, and 3 shares of C. c. sell the EFT and buy 2 shares of IBM, 3 shares of MRK, and 3 shares of C. d. do nothing, no arbitrage opportunity exists. e. buy the EFT and sell 2 shares of IBM, 2 shares of MRK, and 3 shares of C.
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