Finra Exam SIE Topic 5 Question 13 Discussion

Actual exam question for Finra's SIE exam

Question #: 13
Topic #: 5

[All SIE Questions]

Which of the following statements describes a characteristic of exchange-traded funds (ETFs)?

AETFs are offered with front-end or back-end loads.

BETFs are not permitted to be purchased on margin.

CETFs are purchased and sold daily at net asset value (NAV).

DETF expense ratios are generally lower than those of mutual funds.

Show Suggested Answer

Suggested Answer: D

Step by Step Explanation:

ETF Expense Ratios: ETFs generally have lower expense ratios compared to mutual funds due to their passive management style.

Incorrect Options:

A: ETFs do not have sales loads; they are traded like stocks.

B: ETFs can be purchased on margin, like other equities.

C: ETFs are traded throughout the day at market prices, not NAV.

SEC ETF Fact Sheet: SEC ETF Info.

by Maile at Jul 12, 2025, 07:43 AM

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Maxima

1 days ago

Option D seems like the correct answer. ETF expense ratios are generally lower than mutual funds, making them a more cost-effective investment option.

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Lorean

4 days ago

I think the answer is D.

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