Which of the following statements is(are)correct concerning exchange-traded funds (ETFs)?
I.You can buy and sell ETFs any time during trading hours.
II.ETFs are actively managed.
III.ETFs have high portfolio turnover rates.
IV.ETFs rarely distribute any capital gains.

Question

Quizplus · Accepted Answer

Statement I is correct - ETFs can be bought and sold anytime during trading hours.

Statement II is incorrect - ETFs are typically passively managed, meaning they track an underlying index or benchmark rather than being actively managed by a fund manager.

Statement III is also incorrect - ETFs often have low portfolio turnover rates, as they are designed to track an index rather than actively buy and sell securities.

Statement IV is correct - ETFs can be tax-efficient, as they rarely distribute capital gains to their investors.

Which of the Following Statements Is(are)correct Concerning Exchange-Traded Funds (ETFs)