Question #5
Reading: Reading 35 Exchange-Traded Funds - Mechanics and Applications
PDF File: Reading 35 Exchange-Traded Funds - Mechanics and Applications.pdf
Page: 2
Status: Correct
Correct Answer: A
Question
When an ETF trades on the primary market, this is most likely to refer to a trade that happens:
Answer Choices:
A. on an exchange
B. over-the-counter
C. between APs and issuers
Explanation
ETFs trade on both the primary market (directly between issuers and APs) and on the
secondary markets (over-the-counter or exchange-based trades, like listed equity).