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?

---

Definitions:

Monopolistic Firm

A single firm that dominates a particular market or industry, often characterized by the absence of competition, which results in high prices and inferior products.

Monopolistically Competitive Firm

A Monopolistically Competitive Firm operates in a market structure characterized by many firms offering products that are similar but not identical, allowing for some degree of market power in setting prices.

Homogeneous

A description of products or services that are identical in quality and cannot be distinguished from one another by consumers.

Monopolistically Competitive

Describing a market structure where many companies sell products that are similar but not identical, leading to competitive prices and product differentiation.