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Finra SIE Exam - Topic 6 Question 17 Discussion

Actual exam question for Finra's SIE exam
Question #: 17
Topic #: 6
[All SIE Questions]

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

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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 Barb at Nov 20, 2025, 09:47 AM

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Julie
9 hours ago
Wait, can ETFs really outperform the index? That seems off.
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Lorrine
6 days ago
Totally agree, D is spot on about lower fees!
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Maurine
11 days ago
Passive ETFs with lower fees? Sign me up, I'm tired of those high-flying fund managers eating up all my returns!
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Nichelle
16 days ago
A) It has a high portfolio turnover ratio. Nah, that's the opposite of what an index ETF is all about.
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Sarah
21 days ago
C) It offers an opportunity to outperform the index it tracks. That's a bit of a stretch for an index ETF, don't you think?
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Ria
26 days ago
B) It is priced once daily, generally at the market close. This is also true of index ETFs.
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Artie
1 month ago
I have a vague memory that option A is incorrect since index ETFs typically have lower turnover compared to actively managed funds.
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Milly
1 month ago
I recall a practice question about ETFs, and I think option C is misleading because they usually aim to match the index, not outperform it.
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Alexia
1 month ago
I'm not entirely sure, but I feel like option D could be true since passive ETFs are generally cheaper than active ones.
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Louann
2 months ago
I think option B sounds familiar because I remember reading that ETFs are usually priced at the end of the trading day.
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Paola
2 months ago
Ugh, I hate questions about ETFs. There are just so many different types, it's hard to keep track. I'll have to read through the options slowly and try to eliminate the ones that don't sound right.
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Tran
2 months ago
Okay, I've got this. Index ETFs are passively managed, so they should have lower fees than actively managed funds. And they're priced throughout the day, not just at the close. I'm pretty confident I can get this right.
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Precious
2 months ago
D) Passive ETFs will typically have lower fees than those associated with actively managed ETFs. This is the correct answer.
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Fidelia
3 months ago
Haha, an index ETF outperforming the index? That's like a dog chasing its own tail!
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Dudley
3 months ago
B is true, ETFs are priced at market close.
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Beckie
3 months ago
Hmm, I'm a bit unsure about this one. I know index ETFs track a specific index, but I'm not totally clear on the details around pricing and fees. I'll need to think this through carefully.
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Johanna
3 months ago
This looks like a straightforward question about index ETFs. I think I'll start by reviewing what I know about their key characteristics.
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Gracia
2 months ago
I agree, B makes the most sense.
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Angelo
2 months ago
I think option B is correct. Priced once daily sounds right.
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