SIE practice questionmediumETFs
Why might an investor choose an index ETF over an actively managed mutual fund?
- AETFs generally have lower expenses and offer intraday liquidity.✓ Correct answer
- BETFs guarantee higher returns.
- CMutual funds have less regulatory oversight.
- DMutual funds are only available to institutional investors.
Explanation
Why A — ETFs generally have lower expenses and offer intraday liquidity.
ETFs typically feature lower expenses and trade throughout the day. They do not guarantee performance (B), and mutual funds have ample regulatory oversight (C) and are widely available (D).
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Companies & Packaged Products questions
- A distinguishing characteristic of a unit investment trust (UIT) compared to a mutual fund is that a UIT:
- An investor trades ETF shares during market hours. How does this compare to open-end mutual funds?
- Upon maturity, a unit investment trust (UIT) typically:
- Which of the following is a true statement about ETF share creation and redemption?