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1.
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.
2.
Exchange-traded funds are a cost-effective choice for investors who _______.
Use discount brokers, invest a large lump sum of money, and are willing to hold the investment for the long term. For others, an exchange-traded fund may not have a big cost advantage over a plain-vanilla, low-cost index fund.
3.
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).
4.
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.
5.
Exchange-traded funds provide exposure to commodities markets.
True. ETFs provide more exposure to commodities than they ever did before.
