One feature that mutual funds and exchange traded funds have in common is
A)they trade continuously throughout the trading day.
B)their portfolios are always based on one of the major market indexes.
C)they invest in broadly diversified portfolios of securities.
D)investors purchase share from the funds managers rather than from other investors.

Question

Quizplus · Accepted Answer

Both mutual funds and exchange traded funds invest in broadly diversified portfolios of securities. Although some mutual funds may track one of the major market indexes, it is not a requirement for either type of fund. Mutual fund shares are purchased directly from the fund company, while ETF shares are bought and sold on an exchange like individual stocks, so D is not a common feature. Additionally, while ETFs do trade continuously throughout the trading day, mutual funds are only priced and traded at the end of the trading day, so A is not a common feature.

One Feature That Mutual Funds and Exchange Traded Funds Have