{"id":84785,"date":"2025-06-01T02:50:14","date_gmt":"2025-06-01T02:50:14","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=84785"},"modified":"2025-06-01T02:50:14","modified_gmt":"2025-06-01T02:50:14","slug":"which-one-of-the-following-statements-about-exchange-traded-fund-etf","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/","title":{"rendered":"Which one of the following statements about Exchange-Traded Fund (ETF)"},"content":{"rendered":"

Which one of the following statements about Exchange-Traded Fund (ETF) is not correct?<\/p>\n

[amp_mcq option1=”It is a marketable security.” option2=”It experiences price changes throughout the day.” option3=”It typically has lower daily liquidity and higher fees than mutual fund shares.” option4=”An ETF does not have its net asset value calculated once at the end of every day.” correct=”option3″]<\/p>\n

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This question was previously asked in<\/div>\n
UPSC CDS-1 – 2018<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares.<\/section>\n
Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.<\/section>\n
Statements A, B, and D are generally correct descriptions of ETFs. A) ETFs are indeed marketable securities traded on exchanges. B) Their price fluctuates throughout the trading day based on market supply and demand, similar to stocks. D) While the market price changes continuously, the official NAV of the underlying portfolio is calculated at the end of the trading day, but the ETF’s traded price can diverge from its NAV due to market forces.<\/section>\n","protected":false},"excerpt":{"rendered":"

Which one of the following statements about Exchange-Traded Fund (ETF) is not correct? [amp_mcq option1=”It is a marketable security.” option2=”It experiences price changes throughout the day.” option3=”It typically has lower daily liquidity and higher fees than mutual fund shares.” option4=”An ETF does not have its net asset value calculated once at the end of every … <\/p>\n

Detailed SolutionWhich one of the following statements about Exchange-Traded Fund (ETF)<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1087],"tags":[1114,1120,1190],"class_list":["post-84785","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-1","tag-1114","tag-economic-development","tag-money-banking","no-featured-image-padding"],"yoast_head":"\nWhich one of the following statements about Exchange-Traded Fund (ETF)<\/title>\n<meta name=\"description\" content=\"The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares. Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which one of the following statements about Exchange-Traded Fund (ETF)\" \/>\n<meta property=\"og:description\" content=\"The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares. Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T02:50:14+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which one of the following statements about Exchange-Traded Fund (ETF)","description":"The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares. Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/","og_locale":"en_US","og_type":"article","og_title":"Which one of the following statements about Exchange-Traded Fund (ETF)","og_description":"The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares. Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T02:50:14+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/","url":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/","name":"Which one of the following statements about Exchange-Traded Fund (ETF)","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T02:50:14+00:00","dateModified":"2025-06-01T02:50:14+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"The correct answer is C) It typically has lower daily liquidity and higher fees than mutual fund shares. Exchange-Traded Funds (ETFs) are designed to be highly liquid and are known for their low expense ratios (fees) compared to many traditional mutual funds, especially actively managed ones. ETFs trade on stock exchanges throughout the day, providing intra-day liquidity, unlike mutual funds whose trades are settled only once per day at the Net Asset Value (NAV). Therefore, the statement that ETFs typically have lower daily liquidity and higher fees than mutual fund shares is incorrect.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-one-of-the-following-statements-about-exchange-traded-fund-etf\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CDS-1","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-cds-1\/"},{"@type":"ListItem","position":3,"name":"Which one of the following statements about Exchange-Traded Fund (ETF)"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/761a7274f9cce048fa5b921221e7934820d74514df93ef195a9d22af0c1c9001?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/84785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=84785"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/84785\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=84785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=84785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=84785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}