Consider the following statements with respect to Mutual Fund and Exchange Traded Fund ETF 1 Mutual ...........

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Consider the following statements with respect to Mutual Fund and Exchange Traded Fund (ETF):

1.Mutual fund is like an ETF, comprises of equities of different companies.

2.Mutual fund is more liquid and marketable as compared to ETF.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Mutual fund is like an ETF, comprises of equities of different companies: This statement is correct. Both mutual funds and ETFs are investment vehicles that pool money from investors to invest in a diversified portfolio of assets, which may include equities (stocks) of different companies, bonds, or other securities.

Mutual fund is more liquid and marketable as compared to ETF: This statement is generally not correct. In many cases, ETFs are considered to be more liquid than mutual funds. ETFs trade on stock exchanges like individual stocks, allowing investors to buy and sell them throughout the trading day at market prices. Mutual funds, on the other hand, are typically bought or sold at the end of the trading day at the net asset value (NAV) price. The liquidity of an investment depends on various factors, and it's not accurate to generalize that mutual funds are more liquid than ETFs.

Therefore, the correct option is 1 only.