Products & RisksQuestion 22 of 125
An exchange-traded fund (ETF) differs from a traditional open-end mutual fund primarily because an ETF:
a.Can only be bought once per day at the closing NAV
b.Trades intraday on an exchange at market-determined prices
c.Is guaranteed against loss by the sponsor
d.Cannot hold a diversified portfolio
Explanation
ETF shares trade throughout the day on an exchange like a stock, so investors transact at intraday market prices that may differ slightly from NAV, and can use limit or stop orders. Traditional mutual fund shares are priced once daily at NAV after the market close (forward pricing).
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