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1.
What does the intraday indicative value index show investors about exchange-traded funds?
What the net asset value of the underlying holdings is worth at any given time. The IIV is an important tool for determining what an ETF is worth at any point.
2.
What is the term for the sum of the value of the constituents of an exchange-traded fund's underlying basket?
Net asset value (NAV). Net asset value is the aggregate value of the underlying securities. This can be found every 15 seconds throughout the day by referencing the intraday indicative value (IIV) index. This is a tool used to measure the current market price throughout the day.
3.
Bid-ask spreads on exchange-traded funds tend to be widest near _______.
Market-open.
4.
What trading practice keeps exchange-traded fund prices close to their net asset values?
Arbitrage. With arbitrage, traders take advantage of the difference between the market price and the net asset value.
5.
Which type of order will sell a position at a specified price only once a predetermined limit (stop) has been triggered?
Stop-limit. A stop-limit order becomes a limit order once a stop has been triggered.
