Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Leveraged inverse exchange-traded funds aim to provide _______.
Choose wisely. There is only one correct answer.
Several times an index's return. They aim for two or three times the index's return.
2.
Merger arbitrage involves buying stocks that are acquisition targets and _______.
Choose wisely. There is only one correct answer.
Shorting the stocks of the acquiring companies or a broad index of stocks. Merger arbitrage is a type of long-short strategy.
3.
Futures-based, long-commodity exchange-traded funds work best as what kind of strategy?
Choose wisely. There is only one correct answer.
Tactical. The other terms refer to currency-oriented ETF strategies.
4.
In order for an inverse exchange-traded fund to provide several times an index's return, it must use leveraging.
Choose wisely. There is only one correct answer.
True. Along with compounding, such a fund would use leverage to achieve its aim in a bear market.
5.
When investing in currencies via exchange-traded funds, a long position in one currency always means a _______ in another currency.
Choose wisely. There is only one correct answer.
Short position. The two positions are used in tandem.