Which investment vehicle is a basket of securities that trades on an exchange like a stock and can contain stocks, commodities, or bonds?

• A. Net Asset Value (NAV)
• B. Expense Ratio
• C. Exchange Traded Fund (ETF)
• D. Real Estate Investment Trust (REIT)

Answer: (C)

An exchange-traded fund embodies the idea of a single investment vehicle that pools a basket of assets into one fund and trades on an exchange like a stock. An ETF can hold stocks, bonds, or commodities, or a mix of these, and its shares are bought and sold throughout the trading day at market prices. This intraday liquidity and diversification are what make ETFs distinct from mutual funds, which are priced only at the end of the day and don’t trade on an exchange. The other terms serve different purposes: NAV is the per-share value of the fund’s holdings used for pricing; the expense ratio is the annual fee to run the fund; a REIT is a company that owns real estate and trades like a stock, not a diversified basket of different asset classes. So the vehicle described is an ETF.