Question

True or False It is possible for ETF prices to diverge significantly from their net asset...

True or False

It is possible for ETF prices to diverge significantly from their net asset value

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

True, it is possible for ETF prices to diverge significantly from their net asset value (NAV)

An exchange-traded fund (ETF) market price is the price at which shares in the ETF can be bought or sold on the exchanges during trading hours. Where as the net asset value is determined by adding up the value of all assets in the fund, including assets and cash, subtracting any liabilities, and then dividing that value by the number of outstanding shares in the ETF.

As these are trading on exchanges, supply and demand decides that market price. If the market value gets too high compared to the NAV, there would be significant divergence from their net asset value

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If the rate of interest increases, a asset prices decrease. True or False?
If the rate of interest increases, a asset prices decrease. True or False?
DOES AN ARITHMETIC SEQUENCE ALWAYS DIVERGE? TRUE/FALSE AND EXPLAIN WHY
DOES AN ARITHMETIC SEQUENCE ALWAYS DIVERGE? TRUE/FALSE AND EXPLAIN WHY
Suppose that an ETF trades at a price below its net asset value. Describe what authorized...
Suppose that an ETF trades at a price below its net asset value. Describe what authorized participants (APs) could do to take advantage of this discrepancy. What would be the likely effect of the APs’ actions?
1.[ True / False ] The return of a risky asset can be treated as a...
1.[ True / False ] The return of a risky asset can be treated as a random variable, and an investment opportunity can be defined by its return distribution. 2.[ True / False ] By estimating the expected return, variance, skewness, and kurtosis of an asset, we can have a rough idea of how its return distribution looks like 3. [ True / False ] The real rate of interest can be understood as the price on money and is...
1) Price searchers can set the prices of their products. True or False: The ability to...
1) Price searchers can set the prices of their products. True or False: The ability to set price means that price searchers will always charge the highest possible price for their products. A) True B) False 2) True or False: Although price searchers can set their prices, the prices they can set are still affected by market conditions. A) True B) False Suppose firms in a competitive price-searcher market with low barriers to entry are earning an economic profit. Firms...
We use the Capital Asset Pricing Model to calculate prices of capital assets. a. True b....
We use the Capital Asset Pricing Model to calculate prices of capital assets. a. True b. False
[True, False or Uncertain] If prices double and quantities double from one decade to the next...
[True, False or Uncertain] If prices double and quantities double from one decade to the next than inflation was 100%.   Indicate the best answer and then explain (if true why it is true; if false provide a counter-example).
1) The net present value varies depending on the timing of an investment's cash flows. (True...
1) The net present value varies depending on the timing of an investment's cash flows. (True / False) 2) Semi-strong form efficient markets do not include private information in asset prices. (True / False) 3) The weighted average cost of capital includes the cost of equity and its aftertax cost of debt. (True / False)
It is possible to engage in systematic random sampling from a stratified sample. True False
It is possible to engage in systematic random sampling from a stratified sample. True False
Select True or False for the following statements about Heisenberg's Uncertainty Principle. True False  It is possible...
Select True or False for the following statements about Heisenberg's Uncertainty Principle. True False  It is possible to measure simultaneously the y and z positions of a particle exactly. True False  It is not possible to measure simultaneously the y and z momentum components of a particle exactly. True False  It is not possible to measure simultaneously the y position and the ymomentum component of a particle exactly.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT