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Basic Question 11 of 15
Which of the following is the LEAST ACCURATE with respect to exchange-traded funds (ETFs)?
B. It is very common for ETF prices to deviate away from their respective net asset value per share.
C. ETFs are essentially shares representing ownership in a portfolio.
D. Unlike traditional open-ended mutual funds, ETFs do not require any accounting at the shareholder level.
A. The in-kind redemption feature of an ETF implies that when an investor sells her shares, a potential tax liability will not arise for the remaining shareholders.
B. It is very common for ETF prices to deviate away from their respective net asset value per share.
C. ETFs are essentially shares representing ownership in a portfolio.
D. Unlike traditional open-ended mutual funds, ETFs do not require any accounting at the shareholder level.
User Contributed Comments 2
| User | Comment |
|---|---|
| tichas | Study on ETF,S in depth |
| khalifa92 | textbook "known as authorized participants (APs), has the option of trading directly with the ETF. if the market price of an equity ETF is sufficiently below its net asset value, APs will buy shares in the secondary market at the market price and redeem shares at net asset value with the fund." |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe types of financial intermediaries and services that they provide
CFA® 2024 Level I Curriculum, Volume 3, Module 1.