n NISM Certifications
NSM General NISM
Medium

Exchange Traded Funds (ETFs) are characterized by:

Practice question from C3 - Test Your Knowledge — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Buying and selling only at the end of the trading day

  2. Trading like common stocks on stock exchanges with typically lower management fees

    Correct answer

  3. C

    Investing only in government bonds

  4. D

    Having high expense ratios compared to actively managed funds

Why this is the answer

ETFs trade on stock exchanges similar to stocks and generally have lower management fees due to passive management.

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