Question

All of the following are characteristics of exchange-traded notes (ETNs) EXCEPT

A)their value can be impacted by changes in the credit rating of the issuer
B)they are issued by financial institutions such as banks
C)each note is secured by a single specified asset
D)they can be bought or sold during normal trading hours on an exchange

Answer 1

Exchange-traded notes (ETNs) are issued by financial institutions, can be bought or sold on an exchange, and their value can be impacted by changes in the credit rating of the issuer. However, ETNs do not have direct ownership of any underlying assets.

Step-by-step explanation:

Exchange-traded notes (ETNs) have several characteristics. They are issued by financial institutions such as banks and can be bought or sold during normal trading hours on an exchange. Additionally, their value can be impacted by changes in the credit rating of the issuer.

However, one characteristic that does not apply to ETNs is that each note is secured by a single specified asset. Unlike exchange-traded funds (ETFs), ETNs are unsecured debt securities, meaning they do not have direct ownership of any underlying assets.