Investing in ETFs, Open-End, and Closed-End Funds: A Comparison

Comparing ETFs, Open-End, and Closed-End Funds

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Question

Nina Foch, CFA, is considering investing in an exchange traded fund (ETF). However, she is unsure how the ETF compares to open-end and closed-end funds.

Which of the following statements comparing ETFs with open-end and closed-end funds is least likely to be true?

Answers

A. ETF shares can be sold short, while open-end fund shares cannot be shorted.

B. The legal structure of an ETF is similar to a closed-end fund.

C. ETF shares trade like closed-end fund shares.

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Explanations

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A. B. C.

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