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Portfolios 403: Exchange-Traded Funds

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1.
Commodity or currency exchange-traded funds _______.
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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.
2.
Most exchange-traded funds are index funds.
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True. This fact has many advantages for investors who want to minimize capital gains, as index funds rarely sell their holdings.
3.
Which statement below is true?
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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.
Like mutual funds, exchange-traded funds invest in _______.
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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).
5.
Exchange-traded funds provide exposure to commodities markets.
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True. ETFs provide more exposure to commodities than they ever did before.