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ETFs 111: Investing in Alternatives with Exchange-Traded Funds

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1.
Leveraged inverse exchange-traded funds aim to provide _______.
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Several times an index's return. They aim for two or three times the index's return.
2.
Futures-based, long-commodity exchange-traded funds work best as what kind of strategy?
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Tactical. The other terms refer to currency-oriented ETF strategies.
3.
Merger arbitrage involves buying stocks that are acquisition targets and _______.
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Shorting the stocks of the acquiring companies or a broad index of stocks. Merger arbitrage is a type of long-short strategy.
4.
What does a buy-write stock-index strategy do?
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Sells call options on a stock index. A buy-write or covered-call writing strategy writes or sells call options on a stock index, such that if the call is exercised, it is "covered," and the cash-value of the index can be delivered to the holder of the option. The premium received from writing the calls provides some protection against losses on underlying stock index, but also caps the gains on the index.
5.
When investing in currencies via exchange-traded funds, a long position in one currency always means a _______ in another currency.
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Short position. The two positions are used in tandem.