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1.
If you incur a lot of costs while investing in exchange-traded funds, those costs will most likely be _______.
Brokerage commissions. Overhead is pretty low because the need for it is low. But you will need to pay brokerage commissions for buying and selling, and they will add up if you trade a lot.
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.
If you want to buy or sell into an exchange-traded fund, you can do so with the fund itself, like with a mutual fund.
False. Exchange-traded funds are different in this respect. You must do your trading with other investors, not the fund itself.
4.
Exchange-traded funds provide exposure to commodities markets.
True. ETFs provide more exposure to commodities than they ever did before.
5.
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.
