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ETFs 105: Exchange-Traded Funds and Fixed Income

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1.
Low fees are less important in bond ETFs than in comparable mutual funds.
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False. Since bonds are traditionally a low-return investment, the minimization of fees is more important.
2.
Fixed income is more actively traded than stocks?
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False. Stocks are traded much more frequently than bonds.
3.
When you invest in a broad-based bond ETF, one result is reduced risk. This is due to _______.
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Diversification. As a rule, a broad base will offer diversification, which generally reduces risk.
4.
When you buy a fixed-income ETF that focuses on a particular type of bond, you expose yourself to additional risks.
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True. As a rule, a limited focus opens up a new field of risks.
5.
Individual bonds trade on the exchange like ETFs?
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False. Bonds are traded on the over-the-counter market.