Which statements about ETFs are true?

• A. (ii) and iii) only.
• B. (i) and (ii) only.
• C. (i) and (iii) only.
• D. (i), (ii) and iii.

Answer: (A)

I’m missing the exact wording of statements i, ii, and iii, so I can’t tailor the explanation to why ii and iii are true and i isn’t. Could you share the three statements?

In general, when evaluating ETF statements, keep in mind:

• ETFs are traded on an exchange and can be bought or sold intraday, with prices that can differ from the underlying index value (NAV) at any moment.

• Most traditional ETFs aim to passively track an index, using a creation/redemption process with authorized participants to help keep the market price close to the NAV, though small tracking error can occur.

• Some statements about ETFs relate to features like liquidity, cost (generally lower expense ratios than active funds), and the mechanics of creation/redemption, while others may claim active management or guaranteed NAV alignment, which aren’t universally true.

Once you provide the exact statements, I’ll explain why ii and iii are the true ones and why the remaining point isn’t.