Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

What is the main difference between Exchange-Traded Funds (ETFs) and mutual funds?

Mutual funds can be bought and sold at any time during the trading day, while ETFs are only traded once per day.

ETFs require a minimum investment amount, while mutual funds do not.

Mutual funds are passively managed, while ETFs are always actively managed.

ETFs are traded on stock exchanges throughout the day, while mutual funds are only traded at the end of the trading day at the net asset value (NAV).

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Verified step by step guidance

Step 1: Understand the concept of Exchange-Traded Funds (ETFs). ETFs are investment funds that are traded on stock exchanges, similar to individual stocks. Their prices fluctuate throughout the trading day based on market demand and supply.

Step 2: Understand the concept of mutual funds. Mutual funds are pooled investment vehicles where investors' money is combined to purchase a diversified portfolio of assets. Mutual funds are priced once per day at the net asset value (NAV), which is calculated after the market closes.

Step 3: Compare the trading mechanisms. ETFs can be bought and sold throughout the trading day on stock exchanges, allowing investors to react to market changes in real-time. Mutual funds, on the other hand, can only be bought or sold at the end of the trading day at the NAV price.

Step 4: Clarify the misconception in the problem. The statement 'Mutual funds can be bought and sold at any time during the trading day, while ETFs are only traded once per day' is incorrect. The reverse is true: ETFs are traded throughout the day, while mutual funds are traded only once per day.

Step 5: Highlight the correct answer. The correct distinction is that ETFs are traded on stock exchanges throughout the day, while mutual funds are only traded at the end of the trading day at the NAV.