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1.
When you invest in a broad-based bond ETF, one result is reduced risk. This is due to _______.
Diversification. As a rule, a broad base will offer diversification, which generally reduces risk.
2.
Which exchange-traded fund is exposed to more risk?
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.
Fixed income is more actively traded than stocks?
False. Stocks are traded much more frequently than bonds.
4.
Low fees are less important in bond ETFs than in comparable mutual funds.
False. Since bonds are traditionally a low-return investment, the minimization of fees is more important.
5.
When you buy a fixed-income ETF that focuses on a particular type of bond, you expose yourself to additional risks.
True. As a rule, a limited focus opens up a new field of risks.