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1.
Most exchange-traded funds are index funds.
True. This fact has many advantages for investors who want to minimize capital gains, as index funds rarely sell their holdings.
2.
Commodity or currency exchange-traded funds _______.
Can provide diversification to a portfolio in small doses. Commodities and currencies can be uncorrelated to broader stock market returns and can therefore help diversify portfolios.
3.
Which statement below is true?
Exchange-traded funds offer investors a way to invest in a corner of the market without having to load up on just one or two individual stocks. As such, investors find them helpful for gaining limited exposure there.
4.
Can exchange-traded funds be good choices for investors who are looking for core stock exposure?
Yes, because there are several inexpensive, broad market ETFs that track major large-cap indexes.
5.
Like mutual funds, exchange-traded funds invest in _______.
All of the above. Though they have other differences, both investments have exposure to the same types of assets and sectors (though ETFs have more exposure to niche sectors).
