What is a potential drawback of investing in ETFs, particularly those with low trading volumes? Option: "Illiquidity, resulting in wider bid-ask spreads", "Higher expense ratios compared to mutual funds", "Exposure to counterparty risk", "Limited diversification options"

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

"Illiquidity, resulting in wider bid-ask spreads"

"Higher expense ratios compared to mutual funds"

"Exposure to counterparty risk"

"Limited diversification options"

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What are potential drawbacks associated with investing in ETFs?

Higher expense ratios compared to traditional mutual funds

Both limited transparency and tracking error risk are potential concerns

Limited transparency regarding the underlying holdings of some ETFs

The risk of tracking errors deviating from the benchmark index

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Which potential challenges should investors consider when evaluating Exchange-Traded Funds (ETFs)?

Absence of management fees due to passive investment strategies

Limited liquidity for certain niche or specialized ETFs

Restrictions on short selling or leveraging ETF positions

The possibility of tracking errors compared to the underlying index

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Which of the following is NOT a factor to consider when evaluating the liquidity of an ETF?

The expense ratio of the ETF.

The liquidity of the underlying securities held by the ETF.

The ETF's total assets under management (AUM).

The average daily trading volume of the ETF.

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What is a potential risk associated with the low trading volume of penny stocks?

Difficulty in finding buyers when selling

Guaranteed high returns

Lower brokerage fees

Increased regulatory scrutiny

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What does a large fund size of an ETF typically indicate?

"Higher risk compared to smaller ETFs"

"Complex investment strategies and higher expense ratios"

"Investor interest and potential for higher liquidity"

"Guaranteed high returns"