Finra SIE Exam - Topic 5 Question 23 Discussion

Actual exam question for Finra's SIE exam

Question #: 23
Topic #: 5

[All SIE Questions]

Which of the following statements is true of an index exchange-traded fund (ETF)?

AIt has a high portfolio turnover ratio.

BIt is priced once daily, generally at the market close.

CIt offers an opportunity to outperform the index it tracks.

DPassive ETFs will typically have lower fees than those associated with actively managed ETFs.

Show Suggested Answer

Suggested Answer: D

Passive ETFs track an index and require minimal management, leading to lower expenses compared to actively managed ETFs.

D is correct because passive ETFs are cost-efficient and have lower fees.

A is incorrect because index ETFs have low turnover since they replicate an index.

B is incorrect because ETFs are priced continuously throughout the trading day.

C is incorrect as ETFs aim to match, not outperform, the index.

by Nancey at May 02, 2026, 07:46 AM

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