1) Index ETFs became increasingly popular over the last years. What is the most important reason for this?

A) They allow investors to profit from falling prices

B) Compared to equity mutual funds, they rebalance quicker (from stocks to cash) in case of market crashes

C) They tend to outperform the underlying index

D) They improve market efficiency

E) None of the above

2) Which statement about junk bonds is true?

A) The expected return of junk bonds does typically not compensate investors for the level of risk they take

B) Bonds with S&P rating of AA or below are considered junk bonds

C) The market for junk bonds never recovered from the bankruptcy of Drexel Burnham Lambert

D) Pension funds are typically not allowed to invest in the junk bond market

E) None of the above