For individual investors purchasing exchange traded funds (ETFs), which of the following is the most important entity that plays a key role in the primary market for ETF shares?

Question

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Authorized participants (APs) are the most important entity that plays a key role in the primary market for ETF shares. APs are responsible for creating or redeeming the ETF shares based on demand and supply in the market. They are the only ones that can interact with the ETF directly and are crucial in maintaining the liquidity and stability of the ETF. Managers of the ETF assets, market exchange officials, the National Association of Securities Dealers (NASD), and specialists play important roles in the secondary market for ETF shares.

For Individual Investors Purchasing Exchange Traded Funds (ETFs), Which of the Following