Question #6
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
ETFs trade in:
Answer Choices:
A. both primary and secondary markets
B. secondary markets only
C. primary markets only
Explanation
ETFs trade on secondary markets, just as stocks and bonds do. Additionally, ETFs also
trade on primary markets when authorized participants (APs) create or redeem ETFs.