Exchange Traded Funds (ETFs) MCQs September 11, 2025 by u930973931_answers 50 Score: 0 Attempted: 0/50 Subscribe 1. An Exchange Traded Fund (ETF) is primarily: (A) A fixed deposit product (B) A pooled investment traded like shares (C) A type of bank loan (D) A government subsidy 2. ETFs are usually traded on: (A) Stock exchanges (B) Banks only (C) Insurance companies (D) Post offices 3. The price of an ETF is based on: (A) Demand and supply only (B) Underlying index or asset value (C) Fixed by government (D) Interest rates 4. ETFs combine features of: (A) Mutual funds and stocks (B) Bonds and loans (C) Insurance and deposits (D) Commodities and real estate 5. Which of the following is an example of an ETF? (A) Nifty BeES (B) Fixed Deposit (C) Treasury Bill (D) Preference Share 6. ETFs provide investors with: (A) Immediate liquidity on exchange (B) Guaranteed fixed return (C) Tax-free interest (D) Personal loans 7. Gold ETFs invest in: (A) Gold mining companies (B) Physical gold or gold derivatives (C) Real estate projects (D) Fixed deposits 8. Index ETFs track the performance of: (A) Real estate prices (B) Stock market indices (C) Inflation rates (D) Government revenue 9. ETFs are suitable for investors who want: (A) Diversification with low costs (B) High guaranteed returns (C) Only debt instruments (D) Tax-free savings 10. The expense ratio of ETFs compared to mutual funds is generally: (A) Higher (B) Lower (C) Equal (D) Zero 11. ETFs can be bought and sold: (A) Only at the end of the day (B) Anytime during trading hours (C) Only once a month (D) Only at maturity 12. NAV of an ETF is calculated: (A) Monthly (B) Yearly (C) Intraday basis (D) At maturity only 13. Which authority regulates ETFs in India? (A) RBI (B) SEBI (C) IRDA (D) Ministry of Finance 14. Which ETF type invests in government bonds? (A) Equity ETF (B) Debt ETF (C) Commodity ETF (D) Currency ETF 15. Liquidity of ETFs depends upon: (A) AMC’s policies (B) Market trading volume (C) Government regulation only (D) Bank policies 16. ETFs are considered more: (A) Transparent than mutual funds (B) Risky than deposits (C) Expensive than shares (D) Illiquid than real estate 17. The settlement cycle for ETF trades is generally: (A) T+1 or T+2 (B) T+7 (C) T+15 (D) T+30 18. ETFs can represent: (A) Equity index (B) Debt securities (C) Commodities like gold (D) All of the above 19. A unique feature of ETFs compared to mutual funds is: (A) Listed and traded like stocks (B) Sold only by AMCs (C) Cannot be sold before maturity (D) Always give fixed return 20. Which is the world’s largest ETF market? (A) India (B) USA (C) Japan (D) China 21. ETFs are most attractive for: (A) Short-term traders and long-term investors (B) Only government officials (C) Only farmers (D) Only banks 22. Tracking error in ETFs refers to: (A) Difference between ETF return and index return (B) Wrong investor details (C) Stock exchange error (D) Tax miscalculation 23. Which type of ETF mirrors the performance of Nifty 50? (A) Commodity ETF (B) Index ETF (C) Debt ETF (D) Global ETF 24. ETFs usually have: (A) Lower transaction costs (B) Higher brokerage fees (C) No cost (D) Fixed interest rates 25. Gold ETFs provide investors exposure to: (A) Physical gold without holding it (B) Silver (C) Real estate (D) Oil 26. ETFs reduce investor risk through: (A) Insider trading (B) Diversification (C) Government guarantee (D) Loans 27. ETFs are traded in: (A) Units like mutual funds (B) Shares on exchange (C) Bonds only (D) Cheques 28. The creation and redemption of ETF units is done through: (A) Market makers or authorized participants (B) Banks (C) Investors directly (D) Stock exchange only 29. ETFs help investors in: (A) Intraday trading (B) Long-term passive investing (C) Both A and B (D) Only government schemes 30. Currency ETFs provide exposure to: (A) Exchange rates (B) Real estate (C) Government subsidies (D) Infrastructure projects 31. ETFs are best suited for: (A) Passive investment strategies (B) Active stock picking (C) Only speculative gambling (D) Bank deposits 32. An ETF is most similar to: (A) Index mutual fund (B) Fixed deposit (C) Insurance policy (D) Loan 33. Which ETF type helps hedge inflation? (A) Commodity ETF (B) Equity ETF (C) Debt ETF (D) Currency ETF 34. The liquidity of ETFs is supported by: (A) Market makers (B) Government subsidies (C) Bank deposits (D) Insurance agents 35. ETFs are generally: (A) Actively managed (B) Passively managed (C) Government guaranteed (D) High-interest deposits 36. Which ETF tracks foreign indices? (A) Domestic ETF (B) International ETF (C) Debt ETF (D) ELSS ETF 37. ETFs disclose their holdings: (A) Daily (B) Weekly (C) Annually (D) Never 38. A disadvantage of ETFs can be: (A) Brokerage cost during frequent trading (B) Diversification (C) Liquidity (D) Transparency 39. ETFs are priced: (A) Intraday on stock exchange (B) Only once daily (C) Monthly (D) Quarterly 40. Sector ETFs invest in: (A) All industries equally (B) Specific industry sectors (C) Only bonds (D) Government projects 41. Which of the following is NOT an ETF type? (A) Equity ETF (B) Bond ETF (C) Commodity ETF (D) Fixed Deposit ETF 42. ETFs allow investors to: (A) Short-sell (B) Use margin trading (C) Hedge portfolios (D) All of the above 43. ETFs can be more tax-efficient because: (A) Lower capital gains distribution (B) Government tax holidays (C) No taxes applied (D) Always exempt from tax 44. Which ETF is ideal for tracking oil prices? (A) Commodity ETF (B) Currency ETF (C) Equity ETF (D) Debt ETF 45. The minimum investment in ETFs is usually: (A) 1 unit/share (B) ₹10,000 (C) ₹50,000 (D) ₹1 lakh 46. ETFs can be used for: (A) Intraday trading (B) Long-term wealth building (C) Both A and B (D) None 47. ETF units are stored in: (A) Savings account (B) Demat account (C) Fixed deposit (D) Insurance policy 48. The first ETF launched in India was: (A) Sensex ETF (B) Nifty BeES (C) Gold ETF (D) Bond ETF 49. ETF investors pay: (A) Expense ratio and brokerage (B) Insurance premium (C) Loan interest (D) Government fee only 50. ETFs are considered: (A) Cost-efficient investment vehicles (B) Guaranteed return products (C) Fixed income schemes (D) Risk-free deposits