SIE practice questioneasyETFs
Which of the following is a feature of most Exchange-Traded Funds (ETFs)?
- AThey are purchased and redeemed only at NAV once daily
- BThey can be traded throughout the day at market prices✓ Correct answer
- CThey always charge front-end sales loads
- DThey cannot be sold short
Explanation
Why B — They can be traded throughout the day at market prices
Most ETFs trade throughout the day at market prices. Open-end mutual funds are purchased and redeemed once daily at NAV, while ETFs generally do not charge front-end loads and can often be sold short.
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