What is the advantage of exchange-traded funds (EFTs) over mutual funds?
A) They can be traded throughout the day like a stock.
B) The cost of the fund management is passed on to the holder.
C) They do not require the services of a broker to complete a transaction.
D) They allow for frequent trading with lower overall transaction fees.
E) They regularly out-perform mutual funds.
Answer: A
Explanation: A) ETFs offer three areas of advantage over mutual funds. They can be traded throughout the day like a stock, they have low operating expenses, and they do not require high initial investments.
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