Which of the Following Statements Is INCORRECT About Exchange-Traded Funds

question 1

Multiple Choice

Which of the following statements is INCORRECT about exchange-traded funds (ETFs) ?

• A) ETFs are securities giving the holder fractional ownership rights over a basket of securities.
• B) ETFs trade on exchanges continuously during trading hours.
• C) ETF trades require brokerage commissions.
• D) ETF shares cannot be shorted.
• E) Arbitrage helps to ensure that an ETF's price will not move too far from its net asset value.

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Definitions:

Base Period

A specific point in time or period that is used as a reference for the calculation of index numbers, such as price indexes or economic indicators.

Price of Gas

The price of gas refers to the cost per unit volume of gasoline, which fluctuates based on factors like crude oil prices, supply, demand, taxes, and inflation.

Price Index

A price index is a statistical measure that examines the weighted average of prices of a basket of consumer goods and services, tracking their changes over time.

Current Year Dollars

A measure that accounts for the value of money, income, or financial figures without adjusting for inflation or deflation, reflecting present-day values.