An affordable way for investors to invest in a diversified basket of securities; provides the diversification of an index fund with the flexibility of a stock is with a(n) ____________ fund.

Question

Quizplus · Accepted Answer

Exchange-traded funds (ETFs) offer investors an affordable and flexible way to invest in a diversified basket of securities. Like an index fund, an ETF tracks a specific index, such as the S&P 500, and provides exposure to a wide range of stocks or other assets in that index. However, unlike a traditional mutual fund, ETFs trade on an exchange like a stock and can be bought and sold throughout the day at market prices, providing investors with greater flexibility and control over their investments. Closed-end and open-end funds are other types of mutual funds, while convertible funds are a specific type of bond fund that invests in convertible bonds. Index funds can be either open-end or exchange-traded.

An Affordable Way for Investors to Invest in a Diversified