SIE Understanding Products and Their Risks Question 89: Answer and Explanation

Question: 89

Which of the following does Exchange-Traded Funds (ETFs) provide that mutual funds do not?

• A. Diversification
• B. Liquidity during the trading day
• C. Professional Management
• D. Conventional investment strategies

Correct Answer: B

Explanation:

B: Choice B is correct because ETFs are traded on an exchange. Choices A, C, and D are typically characteristics of both ETFs and mutual funds.