QUESTION 2 What is the difference between a passively managed index fund and an Exchange-Traded Fund? You can assume that both are benchmarked against the same index. Choose all that apply (multiple answer question). Unlike passive index funds, the return on the ETF may be adversely affected by trading costs that arise from selling A. shares to meet investor redemptions (selling shares back to the fund manager). Unlike passive index funds, ETFs are traded like stocks and you may incur commissions and other trading costs when B. buying or selling ETF shares. me Unlike passive index funds, the ETF may charge a front load (purchase fee) or a back-end load (redemption fee). For retail investors, the ongoing (annual) expenses for ETFs are almost always lower than for passive index funds