Answer:
(c) II and III
Step-by-step explanation:
Exchange-Traded Funds (ETFs) are registered under the Investment Company Act of 1940 as open-end management companies, which is regulated by the Securities and Exchange Commission (SEC) under the Securities Act of 1933. ETF’s are nothing but funds that are traded on the stock market.
Funds are the money or the capital that is collected from people by any company for investment. The company that manages these funds is called Asset Management Company.
The Asset Management Company appoints a fund manager whose main role is to invest the fund in the stock market. The profit that is generated from this investment is then distributed among the investors or people from whom the fund has been collected. But to manage these fund Asset Management Company charges some fees to investors which are called as Expense Ratio.
In the stock market, there are many indices like Sensex, Nifty, Nifty Bank, etc. which gives us the information about the stock market. ETF is a fund that replicates these indices.
Exchange-traded funds are named because
a) They trade on public exchanges (so they can be accessed at market prices just like common stock)
b) They are funds.
So, the correct option is (c).