Which of the following statements is incorrect?
A) ETFs are like index mutual funds in that the share price adjusts over time in response to changes in the index level.
B) ETFs normally do not have capital gains and losses that must be distributed to shareholders.
C) The portfolio management of both ETFs and index mutual funds is very complex.
D) ETFs can be traded throughout the day.

Question

Quizplus · Accepted Answer

Compared to actively managed mutual funds, the portfolio management of both ETFs and index mutual funds is relatively straightforward as their goal is to track a specific index. ETFs and index mutual funds follow a passive management style where the fund managers focus on replicating the index's composition and weighting rather than making discretionary decisions on securities selection.

Which of the Following Statements Is Incorrect