What Is the Primary Disadvantage of an ETF

question 45

Multiple Choice

What is the primary disadvantage of an ETF?

• A) ETFs tend to have lower management fees than comparable index mutual bonds.
• B) ETFs usually have no minimum investment amount.
• C) Investors have to pay a broker commission each time they buy or sell shares.
• D) None of the above are disadvantages of an ETF.

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Definitions:

Normal Rate

A standard or typical rate often used in finance or economics, which can refer to interest rates, growth rates, or other measures.

Implied Constant Growth

A growth rate inferred from the dividend discount model, assuming dividends grow at a constant rate indefinitely.

Market Return

The total return on an investment over a specified period, including dividends, interest, and capital gains, as measured by the change in the market price.

Aggregate Interests

Aggregate interests refer to the collective interests or preferences of a group, community, or society, often considered in policy-making and political theory to reflect the general will.