Final answer:
Investors purchasing ETF shares may pay a commission, but many online brokerages offer commission-free trades. ETFs simplify investing in diversified assets, similar to mutual funds. Corporations do not receive financial returns from secondary market stock transactions.
Step-by-step explanation:
Do investors pay commission when purchasing ETF shares? When purchasing shares of an Exchange-Traded Fund (ETF), investors may incur a commission, which is a fee paid to a broker for executing a buy or sell order.
However, with the advent of the internet and the rise of online brokerages, many transactions can be conducted with no commission fees, especially as competition has led to lower costs for investors. This is akin to purchasing a diversified group of stocks or bonds through mutual funds, which simplifies investing and can involve various fees.
Furthermore, similar to buying real estate where the current owner gets the money and not the original builder, when you buy corporate stock such as General Motors, the current shareholder receives your investment, not the corporation itself. Hence, the original issuer does not benefit financially from this secondary market transaction.