n NISM Certifications
X NISM Series X
Medium

What is one of the main benefits of an Exchange Traded Fund (ETF)?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    ETFs generally give higher returns than mutual funds

  2. Investors can buy/sell units on stock exchanges at prices closely tracking the underlying index

    Correct answer

  3. C

    Investors can decide where to invest within the ETF

  4. D

    Investors get tax benefits

Why this is the answer

ETFs are traded on stock exchanges, allowing investors to buy and sell units during market hours at prices that closely reflect the performance of the underlying index.

Test yourself for real

Take a full NISM Series X mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.