Which of the Following Is a Benefit of an ETF

question 39

Multiple Choice

Which of the following is a benefit of an ETF?

• A) Fees and costs are low.
• B) Allows you to buy a diversified portfolio of stocks (or almost any other asset).
• C) Can buy and sell throughout the day.
• D) All of these answer choices are correct.

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Definitions:

Price-taker Industry

A Price-taker Industry is one in which individual firms have no control over the price of their product and must accept the market price as determined by supply and demand.

Constant Cost Industry

An industry wherein the costs of production do not change as the overall level of output increases or decreases.

Entry Barriers

Obstacles that prevent new competitors from easily entering an industry or area of business, including high startup costs, licensing requirements, and access to technology.

Zero Economic Profit

A situation where a firm's total revenue is exactly equal to its total opportunity costs, indicating no excess returns over the cost of capital.