Consider an ETF That Is Made Up of One Share

question 51

Essay

Consider an ETF that is made up of one share each of IBM,MRK,and C.The current quote for this ETF currently is 163.15 (bid)$163.20 (ask).What should you do?

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Definitions:

Convertible Bond

A bond that can be exchanged for a fixed number of shares of stock for a specified amount of time.

Upside Potential

The estimated amount by which a security’s market price or value could rise, representing the opportunity for profit.

Downside Protection

Downside Protection strategies aim to limit the potential loss in the value of an investment, often through hedging techniques or insurance.

Intrinsic Value

The perceived or calculated true value of an asset, investment, or company based on fundamentals, excluding market value fluctuations.