2018 · Q51
Which one of the following statements about Exchange-Traded Fund (ETF) is not correct?
General KnowledgeIndian Economy
- AIt is a marketable security.
- BIt experiences price changes throughout the day.
- CIt typically has lower daily liquidity and higher fees than mutual fund shares.
- DAn ETP does not have its net asset value calculated once at the end of every day.
Explanation
Exchange-traded funds are marketable securities whose prices fluctuate through the trading day, and they typically offer higher liquidity and lower fees than mutual-fund shares. Statement C claims the reverse — lower liquidity and higher fees — which describes mutual funds, not ETFs. Hence it is the statement that is not correct.