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ETFs 111: Investing in Alternatives with Exchange-Traded Funds

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1.
Leveraged inverse exchange-traded funds aim to provide _______.
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Several times an index's return. They aim for two or three times the index's return.
2.
When investing in currencies via exchange-traded funds, a long position in one currency always means a _______ in another currency.
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Short position. The two positions are used in tandem.
3.
In order for an inverse exchange-traded fund to provide several times an index's return, it must use leveraging.
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True. Along with compounding, such a fund would use leverage to achieve its aim in a bear market.
4.
Price momentum, valuation, and carry are all examples of ________.
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Long positions and short positions. These strategies use both long and short positions to expose themselves to currencies.
5.
Merger arbitrage involves buying stocks that are acquisition targets and _______.
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Shorting the stocks of the acquiring companies or a broad index of stocks. Merger arbitrage is a type of long-short strategy.