SIE Exam Dumps | Which of the following statements is true of an index exchange-traded fund (ETF)?

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Question 4/80

Which of the following statements is true of an index exchange-traded fund (ETF)?

A. It has a high portfolio turnover ratio.

B. It is priced once daily, generally at the market close.

C. It offers an opportunity to outperform the index it tracks.

D. Passive ETFs will typically have lower fees than those associated with actively managed ETFs.

Correct Answer: D

Passive ETFs track an index and require minimal management, leading to lower expenses compared to actively managed ETFs.
* D is correctbecause passive ETFs are cost-efficient and have lower fees.
* Ais incorrect because index ETFs have low turnover since they replicate an index.
* Bis incorrect because ETFs are priced continuously throughout the trading day.
* Cis incorrect as ETFs aim to match, not outperform, the index.

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