SIE (Securities Industry Essentials) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the SIE (Securities Industry Essentials) Exam by studying comprehensive materials, including interactive quizzes and flashcards that cover essential industry concepts. Maximize your scoring potential with targeted practice.

Start Multiple Choice Practice Test
Start Flash Cards

Practice this question and more.

Which of the following is NOT an advantage of an ETF compared to open-end mutual funds?

  1. Undertrading

  2. Intraday trading

  3. Tax efficiency

  4. Lower expense ratios

The correct answer is: Undertrading

An advantage of an ETF, or exchange-traded fund, is its ability to be traded like a stock, allowing for intraday trading. Additionally, ETFs often have lower expense ratios compared to open-end mutual funds, which typically have higher management fees and transaction costs. ETFs are also more tax efficient than mutual funds, as they have lower annual capital gains distributions. Therefore, option A, undertrading, is not an advantage of an ETF and is an incorrect choice.

More Questions Like This