Reading 36
Exchange Traded Funds: Mechanics And Applications
3 modules 20 min
0/3
Exam Focus
This topic review covers introductory material on ETFs. Be able to describe costs, risks, and sources of tracking risk for ETFs, as well as sources of discount/premium relative to NAV. Portfolio management applications of ETFs should be well understood.
Modules
- Module 36.1ETF Mechanics And Tracking ErrorExplain the creation/redemption process of ETFs and the function of authorized participants. · Describe how ETFs are traded in secondary markets. · Describe sources of tracking error for ETFs.7 min · 3 LOS
- Module 36.2Spreads, Pricing Relative To NAV, And CostsDescribe factors affecting ETF bid−ask spreads. · Describe sources of ETF premiums and discounts to NAV. · Describe costs of owning an ETF.5 min · 3 LOS
- Module 36.3ETF Risks And Portfolio ApplicationsDescribe types of ETF risk. · Identify and describe portfolio uses of ETFs.8 min · 2 LOS