Study Guide : ETFs Banks, and Mutual Funds

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Investment fund that can be bought and sold on a stock exchange, similar to stocks, and tracks indexes like the S&P 500 or Nasdaq 100.

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Exchange Traded Funds (ETFs)

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Fee associated with managing a mutual fund or ETF, covering administrative costs and other expenses.

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Expense Ratio

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Annual fee that covers administrative costs in mutual funds or ETFs.

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Expense Ratio

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ETFs are ideal for investors who want diversification within their portfolio at a low cost.

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Investors who want diversification within their portfolio at a low cost.

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Performance of ETFs is based on the performance of the indexes they track.

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The performance of the indexes they track

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Key feature of ETFs that makes them similar to stocks is that they can be bought and sold on a stock exchange.

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They can be bought and sold on a stock exchange

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Purpose of the expense ratio in mutual funds and ETFs is to cover administrative costs and other expenses.

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To cover administrative costs and other expenses

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Services provided by Investment Banks

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Underwriting, research, trading, and sales services.

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Purpose of using leverage

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To purchase securities with the hope of repaying the loan with profits.

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Borrowing money to invest

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Known as leverage, used to increase potential returns.