What is the primary characteristic that distinguishes ETFs from mutual funds in terms of trading?

"ETFs are traded on exchanges throughout the day, similar to stocks, while mutual funds are priced and traded at the end of the day." "ETFs are managed by portfolio managers, while mutual funds are passively managed." "ETFs typically have higher expense ratios compared to mutual funds." "ETFs focus on specific sectors, while mutual funds offer broader market exposure."

Which type of ETF aims to generate returns that are a multiple of the performance of their underlying index?

"Index ETFs" "Leveraged ETFs" "Inverse ETFs" "Commodity ETFs"

What is a key advantage of ETFs in terms of tax efficiency compared to actively managed mutual funds?

"ETFs are exempt from capital gains taxes." "ETFs generate fewer capital gain distributions, leading to potential tax advantages." "ETFs allow investors to offset capital gains with capital losses." "ETFs offer tax-deferred investment options."

What is a potential drawback of investing in ETFs, particularly those with low trading volumes?

"Higher expense ratios compared to mutual funds" "Limited diversification options" "Illiquidity, resulting in wider bid-ask spreads" "Exposure to counterparty risk"

Which type of ETF is specifically designed to benefit from a decline in the value of the underlying market or index?

"Index ETFs" "Inverse ETFs" "Style ETFs" "Active ETFs"