Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

Which of the following is a key characteristic of an exchange traded fund (ETF)?

An ETF's units are listed and traded on a stock exchange at market prices during trading hours, usually tracking an index or asset such as gold. Returns are not guaranteed, and the market price can differ slightly from the NAV.

  1. AUnits are traded on a stock exchange at market prices during trading hoursCorrect
  2. BUnits can be bought only from the fund house at the end-of-day NAV
  3. CIt always invests only in unlisted securities
  4. DIt guarantees a fixed return equal to the index

Explanation

ETFs are listed and trade on exchanges at market prices through the day, usually tracking an index or asset. They do not guarantee returns and may have tracking error.

Did you get it right without looking?

One question tells you little. A timed set on Collective Investment Vehicles shows your real accuracy, how long you take and where you lose marks.

Practise Collective Investment VehiclesFree diagnostic mock

More Collective Investment Vehicles questions