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1.
Low fees are less important in bond ETFs than in comparable mutual funds.
False. Since bonds are traditionally a low-return investment, the minimization of fees is more important.
2.
When you invest in a broad-based bond ETF, one result is reduced risk. This is due to _______.
Diversification. As a rule, a broad base will offer diversification, which generally reduces risk.
3.
Individual bonds trade on the exchange like ETFs?
False. Bonds are traded on the over-the-counter market.
4.
Fixed income is more actively traded than stocks?
False. Stocks are traded much more frequently than bonds.
5.
Which exchange-traded fund is exposed to more risk?
An emerging-markets-bond ETF that hold 10-15 years to maturity. Emerging-markets bonds are one of the most volatile asset classes, and long-maturity bonds carry the most interest-rate risk.