Which statement about exchange-traded funds is true?
A) They don't allow investors to spread their risk.
B) They are less convenient than a mutual fund.
C) You can only buy shares in an ETF at the end of the trading day.
D) They usually charge lower fees than mutual funds.
E) They require a minimum initial investment.

Question

Quizplus · Accepted Answer

Exchange-Traded Funds (ETFs) typically have lower expense ratios compared to mutual funds, making them a cost-effective option for investors. This is because ETFs are passively managed, tracking a specific index, which reduces the management fees.

Which Statement About Exchange-Traded Funds Is True