SIE (Securities Industry Essentials) Practice Exam 2025 - Free SIE Practice Questions and Study Guide

Question: 1 / 400

Which of the following is NOT an advantage of an ETF compared to open-end mutual funds?

Undertrading

An advantage of an ETF, or exchange-traded fund, is its ability to be traded like a stock, allowing for intraday trading. Additionally, ETFs often have lower expense ratios compared to open-end mutual funds, which typically have higher management fees and transaction costs. ETFs are also more tax efficient than mutual funds, as they have lower annual capital gains distributions. Therefore, option A, undertrading, is not an advantage of an ETF and is an incorrect choice.

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Intraday trading

Tax efficiency

Lower expense ratios

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