Which of the Following Statements Is NOT a Difference Between

question 23

Multiple Choice

Which of the following statements is NOT a difference between an exchange traded fund (ETF) and an index fund?

• A) An ETF is structured to track a market index using a diversified basket of securities while an IMF focuses on tracking a market index using a portfolio comprising a defined group of securities within the index.
• B) The structure of an ETF provides greater liquidity than an IMF since its market prices change throughout the day while an IMF is valued only one a day.
• C) An ETF offers a daily disclosure of holdings while an IMF typically discloses through quarterly reports.
• D) An IMF will distribute realized capital gains and losses more frequently than an IMF.

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Definitions:

Bank Account

A financial account maintained by a banking institution where a customer can deposit and withdraw money.

Simple Rate

A simple interest rate is calculated only on the principal amount of a loan or investment, without compounding over time.

Interest Charged

The amount of money charged by a lender to a borrower for the use of borrowed funds, expressed as a percentage of the principal.

Investment Matured

An investment matured refers to when an investment reaches its due date and the principal amount is returned to the investor along with any final interest payments.