NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which statement about Exchange Traded Funds (ETFs) is correct?
ETF units are listed and traded on stock exchanges, and their market price stays close to the NAV of the underlying index or basket because of arbitrage. Retail investors usually buy and sell on the exchange rather than directly with the fund house.
- AETF units are listed and traded on stock exchanges, with market prices that track the underlying index closelyCorrect
- BETF units can be redeemed only at the fund house by retail investors at any time without any exchange
- CETFs always invest only in unlisted securities
- DETF units are issued only to foreign investors
Explanation
ETFs are listed on exchanges and trade like shares, and arbitrage by authorised participants keeps market price close to the NAV of the underlying basket. Retail investors normally transact on the exchange, not directly with the fund house.
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.
More Collective Investment Vehicles questions
- Which statement about Infrastructure Investment Trusts (InvITs) is correct?
- Which of the following AIF categories under SEBI regulations covers funds that invest in start-ups, early-stage ventures and social ventures…
- An Exchange Traded Fund (ETF) tracking the Nifty 50 differs from an actively managed diversified equity fund mainly because the ETF:
- A mutual fund scheme has net assets of Rs 520 crore after all liabilities and accrued expenses, and 20 crore units outstanding. What is the …
- An investor puts Rs 2,00,000 in a mutual fund scheme at NAV Rs 40 and receives 5,000 units. One year later the NAV is Rs 46 and a dividend o…
- Which of the following is a feature of a closed-ended mutual fund scheme in India?