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ETFs 105: Exchange-Traded Funds and Fixed Income

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1.
Fixed income is more actively traded than stocks?
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False. Stocks are traded much more frequently than bonds.
2.
Which exchange-traded fund is exposed to more risk?
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An emerging-markets-bond ETF that hold 10-15 years to maturity. Emerging-markets bonds are one of the most volatile asset classes, and long-maturity bonds carry the most interest-rate risk.
3.
When you buy a fixed-income ETF that focuses on a particular type of bond, you expose yourself to additional risks.
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True. As a rule, a limited focus opens up a new field of risks.
4.
Low fees are less important in bond ETFs than in comparable mutual funds.
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False. Since bonds are traditionally a low-return investment, the minimization of fees is more important.
5.
Individual bonds trade on the exchange like ETFs?
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False. Bonds are traded on the over-the-counter market.