Question

Which of the following statements is most likely an incorrect statement?

Most ETFs track a stock index; those that track a bond index or invest in commodities, such as gold, are not that common.

ETFs have expense ratios that are typically lower than those of the average mutual fund.

Unlike mutual funds, ETFs are traded on a stock exchange, provide the ability to sell short and buy on margin.

An ETF is a type of fund that divides ownership of itself into shares that are held by shareholders and invests in stocks, commodities, or bonds.

Answer 1

Exchange traded fund are not always tracking the stock index and there are various exchange traded fund who are tracking commodities and the bond index as well and they are often common in nature because they are commonly traded on the stock exchange.

All the other statements in regards to exchange traded fund are true.

Correct answer is option (A)Most exchange traded fund track a stock index and those that track a bond index or invest in commodities such as gold are not that common.