PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley

Exercise 4

Describe an ETF and explain how these funds combine the characteristics of open- and closed-end funds. In the Vanguard family of funds, which would most closely resemble a "Spider" (SPDR)? In what respects are the Vanguard fund (that you selected) and SPDRs the same and how are they different? If you could invest in only one of them, which would it be? Explain.