Which of the Following Characteristics Apply to Exchange Traded Funds

question 6

Multiple Choice

Which of the following characteristics apply to exchange traded funds (ETF's) ?
I.unlimited number of outstanding shares
II.typically track the performance of some index
III.market prices may be higher or lower than NAV
IV.may invest in the whole index or use a sample of securities to track the index as closely as possible

• A) I and II only
• B) II and III only
• C) I, II and III only
• D) I, II, and IV only

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Definitions:

Government Purchases

Expenditures by the government on goods and services that directly consume resources or are used in the production of public services.

GDP

Stands for Gross Domestic Product, which is the total value of all goods and services produced within a country's borders in a specific time period and a key indicator of economic health.

Net Exports

The financial difference between what a country sells abroad and what it buys from other countries, representing its trade balance.

Capital Depreciation

The decrease in value of physical assets over time due to use, wear and tear, or obsolescence.