When comparing exchange-traded funds (ETFs) to mutual funds, some features available in ETFs that are NOT found in the mutual funds would include the ability to:
correlate to a specific index.
sell short.
be bought and sold on margin.
represent an entire portfolio, or basket of securities.
A) III and IV.
B) II and III.
C) I and II.
D) I and IV.
Answer: Unlike mutual fund shares, ETF shares can be traded on margin and sold short. They are similar in that they both represent an entire portfolio or basket of securities and both can have portfolios correlated to a specific index.